Transnet bond 3.4 times over-subscribed

11 Jun 2013

Transnet has issued bonds to the value of R3.3bn in order to raise funds for its major infrastructure development programme, the state-owned company said on Monday (10 June).

Transnet group chief executive Brian Molefe said the move affirmed continued investor confidence in the company and its portfolio of projects, despite the ongoing uncertainty in financial markets.

The state-owned transport and logistics firm had planned on issuing a R1bn bond, but Molefe said that due to the overwhelming demand from the market the bond was oversubscribed by over 3.4 times.

The bond issue was part of Transnet's domestic medium-term note programme, which formed part of the company's R15bn funding programme for the year.

Last year, Transnet raised R14.6bn in the capital markets that included issuing a United States bond of R8bn, through its global medium-term note programme.

"So far this year, Transnet has raised about half of the funding requirement for the current financial year," Molefe said.

In addition to the global and domestic bonds, Transnet raised funds through development finance institutions, export credit agencies, and issuing commercial paper.

A commercial paper is an unsecured, short-term debt instrument issued by a corporation for financing, among others, its short-term liabilities.

Molefe said the company raised funds in the local markets on a weekly basis to cover the costs of its R300bn infrastructure investment programme.

Source: Sapa via I-Net Bridge

Source: I-Net Bridge

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