June 14, 2005 South African Home Loans* (SAHL) will soon be launching another exciting innovation for the South Africa securitisation market: the first listed residential mortgage warehousing conduit, the Thekwini Conduit, arranged by Standard Bank. SAHL was the first South African mortgage originator to tap the public residential mortgage backed securitisation market when it launched Thekwini 1 in November 2001. Subsequently, SAHL has completed four further successful issues, constantly setting new market benchmarks in terms of both pricing and volumes. The Thekwini Conduit, which has been sized at R15 billion and has been rated by Fitch Ratings, will provide SAHL with access to short-term money market funds, enabling it to diversify its warehousing funding and benefit from more competitive funding rates. SAHL will, however, continue with its long-term Thekwini programmes in parallel to the Thekwini Conduit, expecting to launch Thekwini 6 in the last quarter of this year. "With the establishment of the Thekwini Conduit, SAHL will secure yet another source of sustainable funding to support the continuing growth we are experiencing in our home loan book. Furthermore, it provides us with an opportunity to respond to investor demand that we've identified in the short-term market. We have strong relationships with our investors and pride ourselves as being at the front-runner in bringing ground-breaking products to the market," says Kevin Penwarden, SAHL's Chief Executive Officer. The Thekwini Conduit provides money market funds with an exciting new investment, backed by a diversified asset pool. AJ Rothman, Director of Securitisation at Standard Bank, the arrangers of the Thekwini Conduit said: "This transaction brings a number of new technologies to the South African securitisation market and demonstrates again just how sophisticated this sector of the South African capital market has become. We are unaware of this technology being utilised in any other country other than the United States." Some of the new features that the Thekwini Conduit introduces to the market are: a high degree of flexibility as the Thekwini Conduit is able to issue both long and short-term notes giving investors the opportunity to invest in notes rated F1+(zaf), F1(zaf), F2(zaf), A(zaf) or BBB(zaf). Further, the notes may be listed and/or unlisted depending on investor requirements. Innovatively, the Thekwini Conduit will also be the first to issue liquidity notes. This enables SAHL to further reduce its reliance on bank facilities. SAHL intends issuing the first tranche of notes from the programme at the end of June 2005 through Standard Bank's money market desk. * Standard Bank is a shareholder in SA Home Loans.
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