State-owned freight and logistics group Transnet has re-entered the international syndicated loan market for the first time in seven years with the signing of a five-year senior unsecured term loan facility of up to $1.5-billion, led by Deutsche Bank.
Transnet said in a statement that the first $685-million drawdown was scheduled for July, and that the funds would be used to finance capital expansions and to refinance existing debt.
The facility is structured to be repaid in eight equal semi-annual instalments after a 12-month grace period, but no details were provided regarding the interest rate.
Transnet CFO Nonkululeko Dlamini described the facility as a “significant milestone” in stabilising Transnet’s liquidity position in support of the group’s 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,” she reported.
The transaction has been supported by a number of investors and development finance institutions, including Deutsche Bank as global coordinator, bookrunner and arranger, as well as the Africa Finance Corporation and the African Export-Import Bank as bookrunners and arrangers, and Ahli United Bank as lead manager.
The transaction includes an ‘Accordion’ feature for up to $1.5-billion and Transnet will, thus, have about $800-million available for drawdown up until December 31, subject to market conditions and investor appetite.
