Transnet to sell first international bonds in more than 10 years

South African rail agency Transnet has began a new $6 billion bond sale programme into the international capital market in more than 10 years.

As the operator of South Africa’s ports and freight-rail network, Transnet announced that it’s planning to soon sell a dollar-denominated note that will account for part of the total.

BusinessTech Africa has learned that the initial bond will be of five-year tenure and investor meetings ahead of the sale began on Thursday,

“The sale comes after the state-owned company breached financial covenants on loans in its last financial year as the amount of coal it moved on the country’s main export line plunged to the lowest in about three decades,” said MoneyWeb.

“It had a cash-to-interest ratio of 2.1 compared with the 2.5 cover ratio required on some of its debt, it said.

“The last bond priced at 265.5 basis points over 10-year treasuries when the company was rated as A3, investment grade, by Moody’s Investors Service. It’s now rated at Ba3, sub-investment grade.”

Looking at a related article, BusinessTech Africa reported that railway agency Transnet has reached an agreement with Liebherr which is a Swiss-based manufacturing company.

The agreement between Liebherr is about the irregular awarding of two tenders regarding the supply of cranes to Transnet.

News24 has it that the Special Investigating Unit (SIU) and Transnet have reached a settlement agreement with Liebherr, a Swiss-based equipment manufacturing company, over the irregular awarding of two tenders for the supply of cranes to a rail agency.

In a statement released on Friday, the investigating unit said the agreement was reached on 31 December 2022 by the SIU, Transnet, and Liebherr.

The aim was to set aside and review the tenders, which were awarded in 2013 and 2014 respectively.