The Industrial Development Corporation of South Africa Limited (IDC) signed a $125-million syndicated term loan with international commercial banks on Thursday.
Chief financial officer Gert Gouws said the loan was signed with a syndicate of 23 financial institutions including Bayerische Landesbank, BNP Paribas, Citibank, Standard Chartered Bank and Sumitomo Mitzui Banking Corporation Europe Limited.
This was the first loan the IDC has taken up since it received its international foreign currency credit rating of Baa2 from Moody’s Investor Service in June, said Gouws.
The IDC, although government-owned, is self-financing, so it has to access capital markets to source loan funding from time to time.
”The IDC originally approached the market with the view of raising $100-million through this syndication,” said Gouws.
They received ”overwhelming interest” and were oversubscribed by more than 100%, he said.
”The over-subscription of the facility reinforces the role of the IDC as a leading development finance institution in Africa. The rating enables the IDC to source competitively priced funding from international lenders, allowing it to fulfill its developmental role more effectively,” said Gouws.
Some Far East banks were part of the loan deal, in the first time they had shown commitment to the IDC.
Gouws said the loan had not been earmarked for any specific projects, but would form part of the IDC’s R2-billion funding requirements for this financial year.
The current facility is the third syndicated loan facility the IDC has concluded since 1997.
Gouws said in the 2001/2002 financial year, IDC approved finance to more than 500 firms, committing itself to more than R4,9-billion for this purpose. More than 23 000 direct new jobs would be created through IDC’s financial contributions in the 200/02 financial years.
Gouws also emphasised IDC’s commitment to the New Economic Partnership for Africa’s Development (Nepad).
”There are currently more than 70 projects under consideration or under implementation in 19 African countries. To date, more than $1,2-billion has been approved for African projects.”
The IDC provides industrial finance to entrepreneurs investing in economically viable projects through a variety of products. – Sapa