JSE-listed platinum group metals miner Northam has completed a private placement of domestic medium-term notes to the value of R1.33-billion in a bookbuild that was oversubscribed by 33%, under Northam’s R15-billion domestic medium-term note (DMTN) programme.
The proceeds from the issuance of the new notes will be applied towards replenishing Northam’s cash reserves used in the course of Northam’s ongoing acquisition of preference shares in Zambezi Platinum.
Following the placement of the new notes, the total nominal value of notes in issue under the programme amounts to about R7.13-billion. The combination of the placement of the new notes and the note switch provides significant additional balance sheet flexibility for Northam.
The new notes were issued on November 25 on the Interest Rate Market of the JSE, primarily as tap issuances under the existing bond series NHM011, NHM014, NHM016, NHM018 and NHM019, as well as issues under new bond series NHM020.
The new notes issued under the existing bond series attract floating rate coupons between 2.5% and 4.25% a year above the three-month rand to Johannesburg Interbank Average Rate (Jibar), with interest payable quarterly.
The new notes issued under the new bond series mature on November 25, 2023 (R132-million) and attract a floating rate coupon of 3.75% a year above the three-month rand to Jibar with interest payable quarterly.
Further, the new notes issued under both the existing bond series and the new bond series have a staggered maturity profile, maturing within the next 12 months (R10-million), 18 months (R345-million), 30 months (R253-million), 36 months (R132-million), 42 months (R390-million) and 54 months (R200-million) from the date of issue.
Meanwhile, Northam also completed a R492.1-million note switch on October 30, effectively extending the maturity date of certain notes issued under bond series NHM017, maturing on February 26, 2021.
This was achieved through the purchase and cancellation of such notes and the simultaneous issue of new notes to the same note holders as a second tranche under bond series NHM012, maturing on June 13, 2022, for the same aggregate nominal amount. The NHM012 series notes have a floating interest rate of 3.75% a year above the three-month ZAR-JIBAR, with interest payable quarterly.
Northam CEO Paul Dunne says Northam is pleased to have such strong investor support for its DMTN programme. “This continues to support Northam’s growth strategy and simultaneously allows the company to accelerate the return of value to shareholders.”