JOHANNESBURG (Reuters) – South African lender Absa Bank, along with U.S based Bank of America Merrill Lynch and Britain’s Standard Chartered Bank, have signed a $500 million syndicated loan, a statement from Absa Group said on Friday.
The loan is the first syndicated loan in which Absa has participated in over a decade. The proceeds will be used for general corporate purposes including trade related finance.
The loan was launched on May 29 to select institutions at a launch amount of $300 million which was subsequently increased to $500 million by ABSA in light of commitments received.
The bank in March reported a 1% dip in full-year headline earnings, including 3.2 billion rand ($221.77 million) costs related to its split from Britain’s Barclays..
Absa also reported potential retrenchments at its retail and business banking unit as part of a planned restructuring.
“The need for this syndicated loan is to fund the growth in our U.S. dollar lending both in South Africa and our Regional Operations, in support of our group strategy,” said Jason Quinn, Absa Group’s financial director.
The repayment period is two years at a 1.05% interest 1.05% per annum. Absa has a one-year extension option available at the borrower’s discretion.
The final group of lenders consists of 19 banks from South Africa, the United States, Britain, Germany, Japan, and the UAE.
Reporting By Naledi Mashishi, editing by David Evans