South African state-owned freight and logistics company Transnet SOC Ltd (Transnet') has successfully re-entered the international syndicated loan market by signing a five-year senior unsecured term loan facility of up to USD 1.5 billion, led by Deutsche Bank AG. The facility will be used by Transnet to finance its capital expansion programme and refinance existing debt in line with Transnet's corporate funding plan for 2022/23.

The first drawdown amounting to USD 685mn is scheduled for July 2022. The facility is also structured to be repaid in eight equal semi-annual installments after a 12-month grace period.

There is an Accordion feature in the transaction for up to USD 1.5 billion, subject to Transnet's consent until December 2022. Given the Accordion feature, Transnet will have approximately USD 800mn available for drawdown up until 31 December 2022, subject to market conditions and investor appetite.

The transaction saw participation from a number of investors and DFIs, demonstrating confidence in Transnet and expanding the company's investor base. The institutions included Deutsche Bank AG as Global Coordinator, Bookrunner and Arranger, Africa Finance Corporation as Bookrunner & Arranger, African Export-Import Bank as Bookrunner & Arranger, and Ahli United Bank as Lead Manager.

Commenting on the transaction, Transnet's Group Chief Financial Officer, Nonkululeko Dlamini said: "This is a significant milestone to stabilize Transnet's liquidity position in support of our financial sustainability. It has been the single largest funding transaction that Transnet has been able to secure in the last seven (7) years with the benefit of diversifying our investor base in the process. The confidence that these investors have demonstrated is encouraging and we continue to focus on improving the operational and financial performance of Transnet."

Transnet is fully owned by the South African government but operates as a corporate entity aimed at both supporting and contributing to the country's freight logistics network.

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