Trustco lists ZAR1 billion bond

The financial services group Trustco has successfully listed its ZAR1 billion bond on the Johannesburg Stock Exchange (JSE), the group has announced.
The bond was listed on 13 June. Trustco also announced that it concluded a deal with leading global development institution, IFC which will see the lending institute purchase the first N$200 million of the company’s ZAR$1 billion notes programme in two tranches. The first tranche will be released next month while no date was given for the release of the second tranche. Trustco said the maturity date of the first tranche will be three years, while the second tranche will be redeemed after four years The notes will be issued at a coupon of 3 month JIBAR plus 3.25% payable twice a year.
As part of the agreement with IFC, Trustco will also issue about 35 million shares to IFC at a price of N$0.85 per share. IFC will have an opportunity to acquire a further N$70 million worth of shares in the future, Trustco said. IFC investment in Trustco follows its existing N$80 million loan to Trustco’s student lending subsidiary, Trustco Finance Limited, which was concluded in 2010. Trustco said the capital raised through the bond and the sale of equity will be used to support its student lending activities in Namibia and expand micro insurance into new countries in Sub-Saharan Africa. “IFC’s investment will enhance access to higher education and affordable insurance,” the company said.
Quinton van Rooyen, Group Managing Director of Trustco Group Holdings said: “This investment from IFC sends an important signal about the strength of Trustco’s business model and prospects for expansion in Africa. It will strengthen our balance sheet and help support our efforts to raise additional financing. “It is the first time that a publicly-traded Namibian company accesses the debt capital markets directly through the listing of a ZAR 1.0 billion note program on the JSE. We are very pleased with the IFC partnership. IFC is a world-leading, AAA rated financial institution.” Saleem Karimjee, IFC Senior Manager for Southern Africa said IFC is committed to supporting companies that provide access to financial products and services at the base of the economic pyramid. “Trustco is an innovative company with opportunities to expand into new markets. By supporting Trustco’s corporate bond programme IFC is further encouraging deeper capital markets, which is critical to the development of Africa’s corporate sector,” he said.