on the occasion announcing the successful syndication of the South African Reserve Bank’s USD1 billion Term Loan Facility
London, 16 June 2003
The South African Reserve Bank is pleased to announce the signing of a USD1 billion syndicated term loan, which matures in 2006. The signing ceremony took place in London on 16 June 2003.
Lending banks could participate at one of three levels; the Mandated Lead Arranger, the Co-Arranger or the Lead Manager level. To participate at the top level of Mandated Lead Arranger, a bank had to provide an initial commitment of USD100 million to the transaction. At the Co-Arranger level, the required commitment was USD50 million, while at the Lead Manager level, USD25 million had to be committed. When the general syndication was closed, banks had been prepared to commit USD2,050 billion to the syndicated loan. That is, banks were willing to commit more than double the amount that the Reserve Bank had indicated it would borrow. This substantial oversubscription bears testimony to the success of the transaction and, more importantly, reflects the improving credit story of the South African economy. The strength of SARB’s international banking relationships have once again allowed a smooth execution of the transaction in a market place which generally was characterised by uncertainty and volatility. The good standing of the South African Reserve Bank in the international financial markets is illustrated by the quality of banks which have participated, as well as the geographic spread of the source of funds.
The syndicated loan may be drawn down in US dollar and/or euro at a margin of 67,5 basis points above Libor/Euribor. This may be compared to the margin of 70 basis points which was negotiated for the three-y ear leg of the 2002 USD1 billion syndicated loan.
As a result of the substantial oversubscription, the final allocations for the Lenders were as follows:
Mandated Lead Arranger USD47.5m
Lead Manager USD14.5m
The list of Lenders is as follows:
Mandated Lead Arrangers
The Bank of Tokyo-Mitsubishi, Ltd. (joint bookrunner)
Barclays Capital (joint bookrunner)
BayernLB (facility agent)
Crédit Agricole Indosuez (joint bookrunner)
Dresdner Kleinwort Wasserstein
HSBC Bank Plc (documentation bank)
ING (signing & publicity)
Mizuho Corporate Bank, Ltd.
Standard Bank London Limited
Standard Chartered Bank
Sumitomo Mitsui Banking Corporation Europe Limited
WestLB (joint bookrunner)
Bank of China
China Construction Bank (CCB)
Goldman Sachs International
KBC Bank N.V. Dublin Branch
LRP Landesbank Rheinland-Pfalz
HSH Nordbank AG
Raiffeisen Zentralbank Österreich Aktiengesellschaft
BMO Financial Group
The Bank of New York
N.M. Rothschild & Sons Limited
USD500 million of the proceeds of the syndicated loan will be used to finance the repayment of the maturing USD500 million gold denominated term loan facility. The balance of the proceeds will be added to the foreign reserves of the South African Reserve Bank.
The Reserve Bank would like to express its appreciation to the banks for supporting this important transaction.