Johannesburg, 20 November 2013 — Global Credit Rating Co. (Pty) Ltd (‘GCR’) has accorded a final, public short term ‘A1+(ZA)(sf)’ rating to the following debentures issued by iNguza Investments (RF) Limited (the ‘Issuer’) on 7 November:
• R400m Senior Secured Floating Rate Notes due 7 February 2014, stock code INGR01 (the ‘Notes’).
The Notes were issued under the iNguza Investments Note Programme administered by Rand Merchant Bank (‘RMB’) a division of FirstRand Bank Limited. The Notes form a ‘sub-programme’ of iNguza Investments Note Programme referred to as the Renewable Energy Transaction. The Notes reference a portfolio of term loans advanced to South African Renewable Energy Project Companies meeting the eligibility criteria of the Renewable Energy Portfolio (the ‘Underlying Security’). The Issuer and FRB acting through its RMB division have entered into a guarantee agreement pursuant to which RMB, in its capacity as Guarantor, irrevocably and unconditionally guarantees the proper and timely payment of all amounts due and payable under the Notes to the Noteholders. The rating of the Notes is derived from the short term credit rating of FirstRand Bank Limited (‘FRB’) in its capacity as the Guarantor on the Notes. The Notes will also benefit from the liquidity that will be provided by RMB through an irrevocable Balancing Note Subscription Agreement. The Balancing Note Subscription Agreement will ensure that the Issuer has sufficient liquidity to pay both interest and principal on the Notes in the event that the Issuer has not received enough funds from the Underlying Security on any payment date or if the Issuer is not able to rollover the notes that will be issued under the Transaction to third party investors. The Issuer will also benefit from an irrevocable Put Option that will be provided by RMB. The Put Option will allow iNguza Investments to sell any defaulted asset back to FRB.
The rating accorded to the Notes relates to timely payment of interest and principal. The rating excludes an assessment of the ability of the Issuer to pay any (early repayment) penalties. If the rating of FRB changes, the rating of the Notes may also change. Since RMB performs several supportive functions to the iNguza Investments Note Programme (including being Account Bank, Swap Counterparty and Administrator), the rating of the Notes thus may also change if the rating of RMB is not considered to be of sufficient credit quality anymore and no appropriate remedial action is undertaken when necessary. For more information on the iNguza Programme, please read GCR’s report on this programme issued in September 2009, as well as the Renewable Energy Portfolio Transaction New Issuance Report to be published on 20 November 2013.
+27 11 784 1771
Head of Structured Finance
+27 11 784 1771
APPLICABLE METHODOLOGIES AND RELATED RESEARCH
Global Credit-Linked Note and Repackaging Vehicle Rating Criteria.
Global Master Criteria for Rating Banks and Other Financial Institutions.
The ratings above were solicited by the Arranger of the Transaction; GCR has been compensated for the provision of the ratings.
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The Arranger participated in the rating process via face-to-face meetings, teleconferences and other written correspondence. Furthermore, the quality of info received was considered adequate and has been independently verified where possible.
The credit rating/s has been disclosed to the Arranger with no contestation of the rating.
GCR has received satisfactory copies of all executed transaction documents and the audited financial statements of the Issuer for the year ended 30 June 2013.
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