Microfinance giant Letshego Holdings Limited said it has successfully listed the first tranche of close to a billion Pula bond whose proceeds will give the group the war chest to expand across the continent.
In a note to shareholders, acting Chairman John Burbidge said the group has completed the listing of a Medium Term Note (MTN) program on the Botswana Stock Exchange (BSE) and the Johannesburg Stock Exchange (JSE).
“As part of this process, the company has completed an issue of the first tranche under the MTN raising ZAR 700 million on the capital markets to support the continued growth of the Letshego Group,” a circular stated.
The group, listed on the BSE, is a leading provider of unsecured consumer loans and operates in 11 African countries in Southern and Eastern Africa.
“This is a ground breaking transaction in that it is the first and largest inward listed bond by any Sub Saharan corporate on the JSE and attracted RSA based as well as international investors.
A combination of fixed and floating senior secured bonds will be issued on 13 December 2012 under this first tranche,” the company said.
The Floating Rate Bond, the LHL01 due 13 December 2015, raised ZAR 281 million and was issued at a credit spread of 500 basis points over the 3-month JIBAR rate. The initial rate payable will be 10.125 percent nominal annual compounded quarterly.
The Fixed Rate Bond, the LHL02 also due 13 December 2015, raised ZAR 194 million and was issued with a fixed coupon of 10.70 percent compounded semi-annually, which equates to a credit spread of 525 basis points above the RSA Government R157 bond.
The Floating Rate Bond LHL03 due 13 December 2016, raised R225 million and was issued at a credit spread of 600 basis points over the 3-month JIBAR rate. The initial rate payable will be 11.125 percent nominal annual compounded quarterly.
This is a debut issue by Letshego Holdings Limited under a JSE listed ZAR 2.5 billion or P2.3 billion Medium Term Note (MTN) program.
Letshego Holdings has operations in Botswana, Mozambique, Namibia, Swaziland, Tanzania, Uganda and Zambia and its acquisition of Micro Africa Limited (MAL) of Kenya presented it with market access in Eastern and Central Africa.
MAL operates in Rwanda, South Sudan and Uganda and an associated company in Tanzania.
Letshego is also looking at rolling out banking service across the continent having made an application to Bank of Botswana for a banking license.
Sudan and Ghana are in some of the markets that the company is targeting.