BC Funding Solutions (Pty) Ltd (“BC Funding Solutions”) is pleased to announce that we have successfully concluded the listing of our maiden bond issue on Johannesburg Stock Exchange (“JSE”). We are pleased to announce further diversification of our capital raising initiatives with the successful listing of an R55 million bond with a transaction value of R60.2 million on the Johannesburg Stock Exchange Debt Markets. The listing is a first of its kind in the Community Scheme lending environment. A true testament to our innovative efforts to make our Community Scheme lending model a secure asset class that is attractive to institutional investors and understanding the requirements for institutional capital raise.
The trade date for the bond listing was Tuesday the 18th of May 2021 under the RedInc Rentals (RF) Limited programme, with:
- a redemption period of 5 years;
- BC Funding Solutions will be raising this funding at an effective rate of Prime plus 3.0%; and
- no raising fees.
The funds settled on Tuesday the 25th of May when payment for the Sale Claims identified in the listing was made.
Although the amount of the listing is slightly less than what we had initially aimed for, it remains a resounding success as we have now, for the first time, managed to attract institutional funding. It is a giant step in building sustainable, longstanding institutional investor relationships. We are happy to have our two investors Aluwani and the Trident/BCFS Premium Income Fund on board for this bond listing and look forward to future listings and fruitful partnerships.
With the creation of this investible instrument, our lending clients; capital raise partners; and the business, in general, will benefit as follows:
- The creation of an institutional secondary market, listed on the JSE, that will provide our clients with increased liquidity and opportunities to trade their loan / claim assets more frequently;
- Access to cheaper funding, which will enhance our competitiveness in the Community Scheme funding space;
- The credibility of an institutional funding base backing our lending solutions; and
- The creation of a platform for future capital raise for further expansion and liquidity opportunities for our current lender clients.
We would like our existing clients to take advantage of the bond listing as it provides them with an opportunity to sell capital and/or their interest earnings that have accrued in the Community Scheme lending environment. You would usually have to consider the impact of the 10% early exit fee, however, thanks to the lower transaction and capital raise costs associated with the bond listing we were able to reduce this cost to 4.85% should you take up the offer.
We are extremely grateful for all the positive feedback received to date and are immensely proud of what we have managed to achieve with the successful listing of the bond. It is through dedication, tenacity and innovation that we set ourselves apart.