Absa successfully launched its senior bond programme

Absa successfully launched its senior bond programme through an inaugural auction of R 250 million ABS5 bonds.

The ABS5, with a maturity of May 2015, was 3.88 times over subscribed and was allotted at a spread of 75bp over its benchmark R157 bond. The entire auction cleared at a yield to maturity of 8.44%. The auction was based on the Dutch auction methodology.

As the first South African bank to establish a senior bond programme with monthly bond auctions and secondary market support, Absa was encouraged by the outcome of the first auction.

As part of an initiative to diversify its funding sources, Absa has created three new senior bonds being the ABS4, the ABS5 and the ABS6 with maturity dates of 2010, 2015 and 2020 respectively. Absa will issue at least one of these bonds through its monthly auction process.

It is proposed that each of these bonds is listed on the Bond Exchange of South Africa (BESA).  The listing of ABS5 will commence with effect from the commencement of business on 23 April 2007.