Transnet sells $2bn bonds

Wednesday, February 10, 2010

Pretoria - Transnet Limited is to sell bonds worth $2 billion on London's Stock Exchange through its Global Medium-Term Note Programme (GMTN).

This will assist in the funding of the parastatal's R80.5 billion infrastructure investment programme.

The GMTN will enable Transnet to issue bonds in either the United States or European debt capital markets when the markets are favourable and cost competitive.

With the existence of the GMTN freight transport and logistics company, Transnet will not have to go through the process of preparing documentation for listing a bond every time it wishes to raise debt funding.

The company's acting CEO Chris Wells said this would allow Transnet to diversify its sources of funds.

"This achievement will enable us to tap international markets to complement our R30 billion Domestic Medium-Term Note Programme. Crucially, it will help us to further diversify our sources of funds - a key objective of our funding strategy," said Wells.

Transnet, though confident that it offers an attractive investment proposition, is planning road shows in key centres in both the US and UK to assess investor appetite.

"We believe investors will find Transnet's offering compelling given their drive for infrastructure investment in well-managed companies in developing countries with sound economic management," said Wells.

Due to the GMTN, Transnet will become the first South African state-owned enterprise to tap international markets without an explicit government guarantee in recent years.