SOUTH Africa’s Nedcor, one of the country’s four main commercial banks, said on Monday it was issuing two billion rands worth of notes, in the country’s largest corporate issue to date. The bank said the issue was being used to raise its capital adequacy ratio and give it the necessary cash to take advantage of “strategic opportunities.” Rick Tudhope, general manager of corporate and strategic activities, said : “We have used it to raise our capital adequacy ratio to 12,6% from 11,1%. This gives us a 2,6% buffer on the new regulations which come into effect in October.” The minimum capital adequacy requirement is being raised next month to 10% from eight percent, in line with international trends, and Nedcor has always attempted to stay well above the legislated minimum. “We like to keep something in the cupboard to enable us to react quickly to any strategic opportunities that may arise,” said Tudhope. Analysts said the move could point to future acquisitions. “If they are looking for any strategic acquisitions I would think it would be in the line of wealth management and private banking and maybe with an international flavour,” said SG Securities analyst Greg Goeller. The bank may have taken the debt route because of the huge drop in the value of its eight percent stake in IT group Didata. It was considering selling all or part of the stake before Didata’s sharp fall in early July on a profit warning and such a sale could have generated plenty of cash for the bank. Didata closed on Monday in Johannesburg at R13,90 compared to a year high of R75 a drop amounting to more than six billion rand on the paper value of Nedcor’s stake. The notes issued have a ten-year legal maturity but were callable in five years and priced 77 basis points above the interpolated yield of South African government bonds and 110 basis points above the R150 due in 2005, the bank said. – Reuters