The notes offered via this programme are JSE-listed medium-term, fixed interest-bearing securities that offer retail, corporate and institutional investors access to superior interest rates. There are multiple options, offering fixed or floating interest rates between 9 and 12% per annum and monthly interest payments, with a fixed three-year maturity. There is also a zero-coupon option, offering 10.66% per annum paid at the end of the three-year term.
The retail notes can be purchased in R100 denominations with a minimum investment requirement of R10 000. Once listed, they can be traded through the JSE.
“These notes provide investors with an easy and inexpensive alternative to receive stable interest income that can be offset against exempt interest allowances. They offer an alternative asset class for individual investors looking to maximise their returns over the medium term, and manage portfolios diversified by asset class,” says Ecsponent Limited CEO Terence Gregory.
“The notes add to the product range offered to our investor base, attracting a different tax type to the dividend withholding tax applicable to the group’s existing preference share programme. The tax treatment of the DMTN Programme is also more favourable to the group when compared to the preference share programme and will contribute to lowering the overall cost of capital.” Gregory adds.
Since its introduction in 2014, the group has raised over R1.5 billion through its listed investment products and recently announced that it secured international funding facilities. The group’s expertise in raising and profitably deploying capital has been a key driver behind its exponential growth over the past eight years.
Ecsponent will use the capital raised through the DMTN Programme to further invest in its Equity Holdings portfolio and operational expenditure to advance the group’s growth.
“We have created substantial growth momentum which is allowing us to continue broadening the group’s funding base and thereby reducing the cost of capital, with the net result of ongoing and improved profitability.”
The Initial Public Offer opens on 3 December and runs until 7 December, after which notes will be issued in recurring tranches. The Offer is not subject to a minimum subscription amount being raised and is not underwritten.