Announcements

Adcorp Holdings Limited – Rating withdrawn on the ADCB01 Notes Paid in Full

Johannesburg, 8 December 2017 – Global Credit Ratings (“GCR”) has withdrawn the final, public long-term credit rating of ‘BBB+(ZA)’ with a Rating Watch accorded to the following Notes issued by Adcorp Holdings Limited (the “Issuer” and the “Transaction”):

R400,000,000 ADCB01, interest at 3M JIBAR + 2.490%.

The rating is withdrawn due to the Issuer having repaid the full interest and capital amount of the ADCB01 on 8 December 2017, as disseminated from the Stock Exchange News Service on 30 November 2017. This followed the Extraordinary Resolution 1 of the Series Noteholders to amend the Final Redemption Date of the Notes from 8 March 2018 to 8 December 2017.

RATINGS HISTORY

Stock code
Initial rating
Long-term rating
Short-term rating
Outlook
ADCB01
8 March 2013
A(ZA)
n.a
Stable
 
 
Stock code
Last rating
Long-term rating
Short-term rating
Outlook
ADCB01
15 June 2017
BBB+(ZA)
n.a
Rating Watch

ANALYTICAL CONTACTS

Primary Analyst

Corné Els

Senior Structured Finance Analyst

+27 11 784 1771

CorneE@globalratings.net

Committee Chairman

Yohan Assous

Sector Head: Structured Finance Ratings

+27 11 784 1771

yohan@globalratings.net

APPLICABLE METHODOLOGIES AND RELATED RESEARCH

Global Structurally Enhanced Corporate Bonds Rating Criteria – Nov ’17;

Global Criteria for Rating Corporate Entities – Feb’17;

Adcorp Group 1 Notes New Issuance Report – Dec’15;

Adcorp Group 1 Notes Surveillance Report – Jun ’17;

Adcorp Rating Announcement – Nov ’17; and

Stock Exchange News Service communication dated 30 November 2017.

RATING LIMITATIONS AND DISCLAIMERS

ALL GCR’S CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: http://GLOBALRATINGS.NET/UNDERSTANDING-RATINGS. IN ADDITION, GCR’S RATING SCALES AND DEFINITIONS ARE ALSO AVAILABLE FOR DOWNLOAD AT THE FOLLOWING LINK: http://GLOBALRATINGS.NET/RATINGS-INFO/RATING-SCALES-DEFINITIONS. GCR’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, PUBLICATION TERMS AND CONDITIONS AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE AT http://GLOBALRATINGS.NET.

GLOSSARY OF TERMS/ACRONYMS USED IN THIS RATING ANNOUNCEMENT AS PER GCR’S STRUCTURED FINANCE GLOSSARY

Bond A long term debt instrument issued by either: a company, institution or the government to raise funds.
Capital The sum of money that is used to generate proceeds.
Credit A contractual agreement in which a borrower receives something of value now, and agrees to repay the lender at some date in the future, generally with interest. The term also refers to the borrowing capacity of an individual or company
Credit Rating An opinion regarding the creditworthiness of an entity, a security or financial instrument, or an issuer of securities or financial instruments, using an established and defined ranking system of rating categories.
International Scale Rating LC International local currency (International LC) ratings measure the likelihood of repayment in the currency of the jurisdiction in which the issuer is domiciled. Therefore, the rating does not take into account the possibility that it will not be able to convert local currency into foreign currency or make transfers between sovereign jurisdictions.
Issuer The party indebted or the person making repayments for its borrowings.
Long-Term Rating A long term rating reflects an issuer’s ability to meet its financial obligations over the following three to five year period, including interest payments and debt redemptions. This encompasses an evaluation of the organisation’s current financial position, as well as how the position may change in the future with regard to meeting longer term financial obligations.
Rating Outlook A Rating outlook indicates the potential direction of a rated entity’s rating over the medium term, typically one to two years. An outlook may be defined as: ‘Stable’ (nothing to suggest that the rating will change), ‘Positive’ (the rating symbol may be raised), ‘Negative’ (the rating symbol may be lowered) or ‘Evolving’ (the rating symbol may be raised or lowered).
Rating Watch Indicates that a rating is under review for possible change in the short term and the movement may be either positive or negative.
Senior A security that has a higher repayment priority than junior securities.
Short-Term Rating A short term rating is an opinion of an issuer’s ability to meet all financial obligations over the upcoming 12 month period, including interest payments and debt redemptions.
Stock Code A unique code allocated to a publicly listed security.
Stock Exchange News Service The Stock Exchange News Service for the JSE.
Structured Finance A method of raising funds in the capital markets. A Structured Finance transaction is established to accomplish certain funding objectives whist reducing risk.
Surveillance Process of monitoring a transaction according to triggers, covenants and key performance indicators.

For a detailed glossary of terms please refer to the GCR website here

SALIENT FEATURES OF ACCORDED RATINGS

GCR affirms that a.) no part of the rating was influenced by any other business activities of the credit rating agency; b.) the rating was based solely on the merits of the rated entity, security or financial instrument being rated; c.) such rating was an independent evaluation of the risks and merits of the rated entity, security or financial instrument; and d.) the validity of the ratings is for a maximum of 12 months, or earlier as indicated by the applicable credit rating document.

The Issuer and Arranger participated in the rating process via face-to-face meetings, teleconferences and other written correspondence. Furthermore, the quality of information received was considered adequate and has been independently verified where possible.

The ratings above were solicited by the Arranger and Issuer of the Transaction; GCR has been compensated for the provision of the ratings.

The credit ratings have been disclosed to the Arranger and Issuer with no contestation of the ratings.

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