Streaming issues? Report here
money-show-thumbnailjpg money-show-thumbnailjpg
The Money Show with Bruce Whitfield
18:00 - 19:00
volume_up
volume_mute

Up Next: SportsTalk with Buhle Madulini
See full line-up
The Money Show with Bruce Whitfield
18:00 - 19:00

Home
arrow_forward
Business

Absa arranges first US dollar social bond issued by an African corporate

17 October 2019 1:08 PM
Tags:
Absa
absa cib
Absa Corporate and Investment Banking
Bayport
social bond
Nasdaq Stockholm Sustainable Bond List
The proceeds of social bonds exclusively finance projects that deliver a social impact.

Absa Corporate and Investment Banking (CIB) was recently appointed by Bayport Management Ltd (Bayport) to be the joint book runner in the first-ever USD social bond to be issued by a corporate in Africa.

The US$260 million senior unsecured social bond, which is due in 2022, was heavily oversubscribed, reflecting investors’ recognition of the positive social impact of Bayport’s services on the markets in which the group operates.

The bond has since been listed on the Nasdaq Stockholm Sustainable Bond List.

The proceeds of social bonds exclusively finance or re-finance projects that deliver a wider social impact. In Bayport’s case, this includes job creation through small and medium-sized enterprises financing, as well as financial inclusion.

Absa’s participation in the Bayport social bond is aligned to the bank’s strategy to be a force for good in society, which focuses on providing finance and assisting clients to achieve sustainable economic growth in the markets it operates, says David Renwick, Head of Investment Banking at CIB.

The Bayport social bond is the first to be raised by a corporate in Africa. Its success shows the potential of attracting local and international investors through such instruments to finance investments and projects that have a direct and lasting impact in Africa.

“There is a definite trend from global investors to invest in more socially responsible projects and companies because they want to see their funds are being invested in responsible activities. Green bonds were the first type of socially responsible investing instruments and have been around for at least a decade. In Africa, green bonds have been issued in countries such as South Africa, Kenya and Nigeria,” says Renwick.

“But social bonds are newer, and while there have been a few such bonds issued in the past, the International Capital Market Association (ICMA) published its Social Bond Guidelines in 2018 to provide a disclosure framework meant to promote integrity in the development of the market by clarifying the approach for issuing a social bond,” he says.

Renwick says Bayport chose Absa because of the long-term relationship the company has with the bank.

“Because they wanted to issue in the international market, it was critical for them to partner with a bank that understands their business and risk profile. It, therefore, became a natural choice to appoint Absa as the only African bank on this transaction,” says Renwick.

“Absa is ready to assist other corporates interested in issuing social bonds because we have both the expertise and access to institutional investors and other global financial institutions with an appetite for these instruments,” he added.

Bayport Capital Markets Executive David Rajak says the successful USD corporate social bond issue affirms that social relevance underpins Bayport’s business and that the market recognises it.

“This, together with the group’s sustained robust financial performance, has helped drive a significantly broader base of investors compared to Bayport’s six previous bonds issues in the international capital markets. One of Bayport’s core values is to enable economic and self-empowerment by giving access to life-changing financial solutions, which is what we will do with the capital raised through the social bond”.

Rajak adds that the social rating is an affirmation of Bayport’s customer-centric business model.

“While our funding partners have long been aware of this, it is great to have it independently acknowledged as well. The social rating cements our commitment to be a socially responsible and relevant credit provider, and to lead market innovation in our industry.”

Bayport’s Botswana operation was the first credit provider in Africa and the first payroll lender in the world to achieve Client Protection Certification by The Smart Campaign.

Get the 10 most-read articles of the week from Bruce Whitfield’s The Money Show, emailed to you every Friday morning:


17 October 2019 1:08 PM
Tags:
Absa
absa cib
Absa Corporate and Investment Banking
Bayport
social bond
Nasdaq Stockholm Sustainable Bond List

More from Business

zulzi-2jpg

[LISTEN] Zulzi's Donald Valoyi talks the future of e-commerce and creating jobs

29 May 2020 3:04 PM

The founder shares his insights on the e-commerce space and how his company has managed to be resilient.

Share this:
Read More arrow_forward

screen-shot-2020-05-28-at-100419-ampng

Cachét Creative specialises in wedding and event planning

29 May 2020 9:15 AM

Every day #702ShoutOut and Ninety One shines the spotlight an SMMEs doing great work during lockdown.

Share this:
Read More arrow_forward

Retirement couple relationship

How to plan for retirement during the Covid-19 crisis

28 May 2020 7:47 PM

The Covid-19 pandemic and the economic destruction in its wake has left some of us wondering if we'll ever be able to retire.

Share this:
Read More arrow_forward

Economy, stock market, recession

How to invest globally...during a global pandemic

28 May 2020 7:36 PM

Investors are not exactly confident to invest in shares and trade on the markets during these times.

Share this:
Read More arrow_forward

charlys-bakery-insta-picpng

Charly's bakery is at risk, asking for help

28 May 2020 7:09 PM

Lots of small businesses are going under or holding on by the skin of their teeth .

Share this:
Read More arrow_forward

Open for business

SA economy opens steadily - will it bring any relief to the contraction?

28 May 2020 6:43 PM

On Monday many sectors of the economy will return to business as usual.

Share this:
Read More arrow_forward

screen-shot-2020-05-28-at-65146-ampng

Il Designs Creative Approach offers branding solutions to various brands

28 May 2020 9:08 AM

Every day #702ShoutOut and Ninety One shines the spotlight an SMMEs doing great work during lockdown.

Share this:
Read More arrow_forward

woman-medical-care-doctore-insurance-form-pexels-photojpeg

The Ombudsman for Short-Term Insurance report - what were the complaints?

27 May 2020 7:58 PM

The Ombud for Short Term Insurance’s aim is to resolve short term insurance complaints ''fairly, efficiently and impartially''.

Share this:
Read More arrow_forward

fashion-1345082jpg

South African based e-commerce fashion retailer gets R100 million investment

27 May 2020 7:25 PM

RunwaySale, an e-commerce fashion retailer, has received an investment of R100 million from an international private equity firm.

Share this:
Read More arrow_forward

Nasa Artemis logo

The Artemis program to put a woman on the Moon

27 May 2020 7:15 PM

One of six women chosen earlier this year may be the first to walk on the moon.

Share this:
Read More arrow_forward