Investec Capital Markets sees appetite for corporate debt

On 18 March, Investec successfully launched Pick n Pay Stores’ (PnP) Domestic Medium Term Note (DMTN) programme on the JSE with an initial subscription of R500 million.

“The interest shown from a wide investor base for the note, which was more than 3 times oversubscribed, is a strong endorsement for the demand in the institutional market for credits of this nature. The issue proves that, there is solid demand for good quality corporate paper which adds diversification to institutional investor portfolios, and the spread of 24 bps above 3 month Jibar is attractive to both issuers and investors alike,” explained Rick Lupini at Investec Capital Markets.

Bakar Jakoet CFO-designate of PnP added, “The programme gives us flexibility around funding alternatives and we are satisfied with the pricing the market has shown for our R500 million commercial paper debut issuance”.

Investec Bank limited is the sole arranger under the programme and sole manager of the debut issuance of R500 million. Investec and Absa are joint dealers to the programme.

The R500 million commercial paper was issued at a spread of 24 bps over 3 month Jibar, providing Pick n Pay with 3 month funding at a fixed rate of 5.815%.