In February 2016, the curator of African Bank Limited, Tom Winterboer, launched exchange offer documents to creditors of African Bank to exchange their claims in African Bank for new debt in the Good Bank.
The role of Strate, as a South African Securities Depository, is to use its state-of-the-art technology to support and promote the safety and efficiency of the financial markets. Strate is pleased to announce that all the events related to African bank were successfully executed on 4 April 2016. Without Strate’s trusted 3rd party status and ability to bring innovative solutions to the market, this complex transaction would not have been possible.
“Strate provided exceptional service and dedication to the lengthy and complicated process. Their clearing and settlement was central in facilitating the exchange of debt instruments and the creation of the new bank instruments,” says Tom Winterboer, head of Financial Services at PricewaterhouseCoopers and curator of African Bank.
Approximately R16,6bn in senior debt and R4,2bn in subordinated debt was exchanged for new African Bank Limited (ABL) securities on several of Strate’s systems, including its new Money Market settlement platform which was launched in March this year. The new debt securities are now tradable in the over-the-counter market, with all clearing and settlement done through Strate.
“Strate worked closely with the Central Securities Depository Participants (CSDPs) to ensure that the listed Domestic Medium Term Notes (DMTNs) and dematerialised instruments in the South African market were successfully exchanged, the new African Bank instruments were issued and the associated cash payments were settled, “ says Gavin Jones, Executive Treasurer of African Bank commenting on the success of the Strate process.
Claims encompassing more than just securities settled by Strate, including foreign jurisdictions (SIX SIS, Euroclear and Clearstream) and funders outside of Strate, were created in one unique and innovative electronic record within Strate which may be traded off-market by investors. ‘
“A huge thanks is due to Strate’s team for the months of dedication and planning which ensured that the execution on 4 April 2016 was a complete success.”
“I would like to congratulate African Bank on this significant milestone. The implementation of Strate’s new BaNCS Money Market system provided us with the flexibility to enable the successful processing of this transaction,” says Strate’s CEO Monica Singer.
About Strate As South Africa’s Central Securities Depository (CSD), Strate is licensed to be an independent provider of post-trade products and services for the financial markets. Strate is internationally recognised as a Financial Market Infrastructure (FMI) that is trusted to use its state-of-the-art technology, international expertise and sound risk management framework to support and promote the safety and efficiency of the financial markets.