Old Mutual Finance (RF) Proprietary Limited, MLA

Aug 17, 2015

Standard Bank of South Africa (SBSA) has been involved with Old Mutual Finance (RF) Proprietary Limited (OMF) since 2009 and has a total primary exposure valued at R2.5 billion. OMF appointed SBSA as the Mandated Lead Arranger and Sole Bookrunner to raise new funding of R1.5 billion. SBSA also participated in the syndicated revolving credit facility by early refinancing R500 million of its existing term loan. OMF used the total proceeds of R2 billion to refinance existing loans and to finance the growth of its unsecured loan book.

The primary business of OMF is the provision of unsecured credit in the SA retail mass market that initially entered the consumer finance market through a joint venture with Business Doctor Consortium, proven operators in the unsecured lending market. OMF has matured into a business that requires diversified funding sources to pursue its growth aspirations.

This new funding will assist OMF in growing its market share from 5% to 6.8% of the total unsecured lending market in South Africa. The target capital raise was R1.2 billion of new terms for loan funding which would support OMF funding for the next 12 to 18 months. Despite a very tough consumer financial environment, the three syndicate participants each committed R500 million of term funding. However, OMF elected to take up the full oversubscribed amount and raised a total of R1.5 billion of new capital alongside SBSA’s refinanced R500 million.

Standard Bank’s client engagement model is centered on commercial mindedness and urgency. This model involves understanding the needs of our clients; provide trusted advice and appropriate solutions that take into account the risks, regulatory environment and market realities.

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