Absa raises R1.16bn for Sanlam through bond issue

Sanlam is one of Africa's leading financial services groups.

Absa acted as co-lead arranger for the subordinated bond. The transaction represents the largest subordinated debt issuance for an insurer since 2006. The bond has been issued with a 10-year maturity‚ call-able after a period of five years and is expected to pay a fixed coupon of 8.70% semi-annually.

The terms of the bond comply with the expected (SAM) guidelines that will come into effect in 2016. The transaction marks Sanlam's return to the ZAR capital markets since its first issuance in 2006.

"This transaction further consolidates Absa's long-standing relationship with Sanlam‚ which has a strong reputation and brand in the market. We are delighted to have taken them to the capital markets‚" said Pieter Venter‚ head of non-bank financial institutions‚ corporate and investment banking division of Absa.

Sanlam achieved a high quality and diverse order book with R1.675bn of orders‚ comprising a broad range of local investors‚ with about 95% of them allocated in the bond. Sanlam achieved its targeted issue amount within price guidance.

Prasanna Nana‚ head of debt capital markets at Absa‚ said: "We are proud to have been selected by Sanlam to work with them on raising funds in the domestic ZAR bonds markets. To raise an amount of this size at attractive pricing levels is a resounding success and comes on the back of our ability to effectively leverage both Barclays' global and Absa's domestic knowledge of relevant regulations and capital markets to structure a tailored but market appropriate financing solution."