Standard to manage $1bn bond

STANDARD Bank on Friday said its selection as the joint lead manager in the $1bn bond issue launched by state logistics company Transnet showed local banks had come of age.

It also showed that they could now compete with global peers who had previously enjoyed a large piece of such transactions.

The 10-year bond issue for Transnet was issued and listed in London on Thursday last week.

Issued at an interest rate of 4%, the bond was also the lowest dollar bond coupon by a South African issuer, and was the first offshore issuance Standard had executed for Transnet.

Andrew Costa, Standard’s head of debt capital markets, said the success of the bond issue showed that offshore investors seeking better yields were positive about SA’s medium-term outlook, particularly as uncertainty lingered in the global economy.

The Reserve Bank, however, downgraded gross domestic product growth to 2,7% from 2,9%, while Absa CEO Maria Ramos said on Friday she expected growth of 2,6% from last year’s 3,1%.

Mr Costa said the deal was a “landmark” for Standard because the large global banking groups have typically been chosen over South African banks for major offshore transactions.

“We are encouraged by the recognition that a South African bank can be a reliable long term partner for local companies in offshore markets,” said Mr Costa.

He said South African bonds were attractive. “With continuing setbacks in the recovery of developed markets, investors are attracted to emerging markets that have continued to perform well,” he said.