South African state-owned freight and logistics company Transnet has re-entered the international syndicated loan market by signing a five-year Senior Unsecured term loan facility of up to $1.5 billion, led by Deutsche Bank AG.
Transnet announced the loan agreement in a statement on Wednesday, noting that the facility would be used to finance the parastatal’s capital expansion programme and to refinance existing debt in line with its corporate funding plan for 2022/23.
The first drawdown amounting to $685 million is scheduled for this month (July). The facility is also structured to be repaid in eight equal semi-annual instalments after a 12-month grace period. There is an Accordion feature in the transaction for up to $1.5bn, subject to Transnet’s consent until December. Given the Accordion feature, Transnet will have approximately $800m available for drawdown up until December 31, subject to market conditions and investor appetite.
The transaction saw participation from a number of investors and direct foreign investors who demonstrated confidence in Transnet and its expanding investor base. The institutions included Deutsche Bank AG as global coordinator, Africa Finance Corporation as bookrunner and arranger, African Export-Import Bank as bookrunner and arranger, and Ahli United Bank as lead manager.
Transnet’s group chief financial officer Nonkululeko Dlamini said: “This is a significant milestone to stabilise Transnet’s liquidity position in support of our financial sustainability. It has been the single largest funding transaction which Transnet has been able to secure in the last seven years, with the benefit of diversifying our investor base in the process,” Dlamini said.
“The confidence that these investors have demonstrated is encouraging and we continue to focus on improving the operational and financial performance of Transnet.”
