Absa Bank (www.Absa.co.za) has successfully refinanced and upsized Harmony Gold Limited’s existing USD 250,000,000 Term Debt to a 3 year USD 350,000,000 facility. Absa Bank acted as Bookrunner, Co-ordinator and Mandated Lead Arranger. The transaction was oversubscribed with the debt syndicated to a total of 8 Lenders, including 3 new Lenders. This allowed Harmony to broaden its banking group, bolster liquidity and achieve its global growth ambitions. Absa Bank is the largest lender in the new Term Debt which further cements their position as one of Harmony’s core relationship banks.
An oversubscription on Harmony’s debt raising is a fantastic result for Harmony. Bank liquidity has strengthened for the mining sector despite a challenging operating environment given the local policy uncertainty, so the oversubscription talks to the depth of Harmony’s bank relationships and the right market read on transaction price and structure.
Harmony’s previous facility was set to mature early in 2018, and the gold mining company was looking to refinance its existing facility to allow it to expand its scope to fund its capital expenditure and growth plans in both South Africa and Papua New Guinea.
Ultimately, this transaction is a demonstration of how Absa partners with clients to help them realise their growth ambitions. The bank is able to deliver on its mandate and has the capability to sell syndicated facilities to local and international financial markets. Most importantly, it also indicates that there is still investment appetite for South African mining companies from offshore investors.