It gives me great pleasure to let you know that today, we announced the publication of a prospectus in respect of a R10 billion Domestic Medium Term Note Programme (DMTN Programme).
The notes offered via this programme are JSE-listed medium-term, fixed interest-bearing securities that provide 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.
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. In addition, they also offer:
  • Stable, predictable income through monthly interest payments.
  • Fixed three-year term, with the option to buy and sell on the JSE.
  • An easy and inexpensive investment alternative.
  • Income can be offset against exempt interest allowances.
  • An alternative asset class for investors looking to diversify their portfolios. 
Offering these notes is beneficial to the Ecsponent group as the tax treatment of the DMTN Programme will contribute to lowering the overall cost of capital. 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.