First Corporate Bond Lists on Yield-X

August 25, 2008 at 12:00 AM EDT
JOHANNESBURG, 25 AUGUST 2008 – Today, Alt-X listed company Calgro M3 listed a R300m debt programme on Yield-X, the JSE’s interest rate exchange. The programme is not only cost effective but gives the company the flexibility to have multiple issuances with different debt instruments and different tenures when and where it suits them.

Initially, Calgro M3 will be raising R40m through the issuing of a short-dated zero coupon bond to enable it to undertake further developments in the low-income housing market, which is its primary business.

“Three fund managers have already snapped up the bond quickly which demonstrates the appetite for the issuing of quality bonds,” says Warren Geers, General Manager of Trading, JSE.

“There are another 4-5 issuers in the pipeline to list bonds which indicates that current market conditions are not a deterrent to issuers wanting to list a bond as long as the company has a need.”

Peter Waweru, CEO of Calgro M3 said “Funding of a development business requires the combination of a diversified set of funding providers in order to arrive at optimal funding mix in terms of cost of debt and tenure and also creating adequate capacity for a developer”.

This listing on the Yield-X has paved the way for residential housing developers to gain access to institutional funding for the first time ever in this country. This will make it possible for the company to raise cheaper priced debt for financing its integrated and affordable housing developments as well replacing costly debt in its operations.

Having listed on the Altx only 9 months ago, we feel proud and excited to be part of this ground breaking event within the maiden year of the company’s listing, putting us on a trajectory to fund growth expectations said Waweru.

For investors wanting to trade bonds, Yield-X listed bonds are particularly appealing in that Yield-X’s trading fees are the most competitive in the market and that as orders are matched anonymously, a credit wash is provided. “Essentially there is no counter-party risk because SAFCOM does the credit wash for each trading participant and thereby is not exposing the balance sheet to the counter-parties,” explains Geers.

In addition, Yield-X also provides the flexibility for trading to either take place through the central order book or transactions can merely be reported to the exchange. Either way, the investor enjoys a high degree of protection as the JSE has set minimum standards which they have to adhere to with the FSB.

About JSE Limited
As South Africa’s only full service securities exchange, the JSE connects buyers and sellers in four different financial markets, namely equities, equity derivatives, agricultural derivatives and interest rate instruments (Yield-X). The JSE Ltd offers the investor a truly first world trading environment, with world class technology, surveillance and settlement in an emerging market context. It is amongst the top 20 largest equities exchanges in terms of market capitalisation in the world. For further information, please visit www.jse.co.za

About Calgro M3
Calgro M3 is a black-empowered residential housing developer with a 13-year track record and was first to market in the Integrated Housing niche, where it offers a combination of Affordable, Gap and RDP housing. It’s housing products also include medium to high income housing to a limited extent as it aims to dominate the Integrated Housing niche through private public partnerships. The company offers an end-to-end solution from land sourcing, financing and development, through housing construction to marketing. Separate specialist business units with dedicated management focus on high growth niche markets, ensuring a deep pool of expertise in each of Calgro M3’s service areas. Calgro M3 listed on the Altx in November last year.

For further information please visit the website: www.calgrom3.com, or contact on phone; 0861 CALGRO or send email, info@calgrom3.com .