RMB helps Life Healthcare raise funding through billion Rand bond auction
Life Healthcare Group Holdings Limited (Life Healthcare), South Africa’s second-largest hospital group by number of beds, appointed RMB as sole lead arranger to establish a domestic medium-term note (DMTN) programme and to manage its inaugural bond issuance.
The programme is being arranged through the Company’s funding subsidiary, Life Healthcare Funding Limited (LHF), and is aimed at diversifying the Company’s South African funding base to include the institutional market.
The initial bond auction saw the issuing of R1 billion in notes, specifically R500 million in three-year notes and R500 million in five-year notes, and was oversubscribed 4.8 times, indicative of the significant institutional and bank interest.
“The healthcare industry has experienced volatility and strain over the past few years as a result of the Covid pandemic, and so we needed to ensure that LHF was able to access the right pockets of liquidity, at the right time, at the optimal price and do so without introducing undue finance risk. The DMTN programme was the ideal domestic funding solution to help develop a new funding platform for Life Healthcare and a presence in the capital markets,” says Leigh Buckley, Head Debt Capital Markets South Africa at RMB.
The relationship between the company and RMB is built off a strong foundation, with the relationship spanning over two decades. In our partnership, RMB has provided comprehensive balance sheet support and debt advisory over the years. This new programme extends our offering to Life Healthcare and enables a more dynamic funding base.
“The bond programme allows Life Healthcare to diversify its sources of funding for its growth aspirations and we are pleased with the support from the investment community at the inaugural bond issuance” says Life Healthcare’s Group CFO, Pieter van der Westhuizen.
RMB and Life Healthcare have also successfully partnered on a syndicated hard currency term facility for the company’s international operations, where RMB was appointed joint coordinator, mandated lead arranger and bookrunner. This partnership started with the inaugural syndicated loan initially in 2017 and the facility was successfully refinanced in 2020.
In addition, RMB have been co-mandated on the 2022 hard currency refinance of GBP183 million (~R3.7 billion) for the three-year tranche of the 2020 syndication. This has provided RMB the opportunity to demonstrate their extensive and in-depth understanding of Life Healthcare’s business having successfully achieved a 2.27x oversubscription across 13 local and international investors.
“Based on our holistic understanding of the client, our Debt Capital Markets and Debt and Trade Solutions teams have been able to work together to ensure the optimal solution is achieved between institutional and bank debt. Our continued support and partnership were instrumental in us winning the mandate for the inaugural ZAR bond issue, and we remain committed to the success of Life Healthcare’s growth strategy both in South Africa and internationally,” adds Chequitta Thebe, Debt & Trade Solutions transactor at RMB.