South Africa’s Absa Banks said it participated in a $500 million syndicated loan agreement to its parent company, Absa Group.
The loan was arranged alongside Bank of America Merrill Lynch and UK’ Standard Chartered Bank.
Absa Group said in a statement that the loan will be used for general corporate purposes including trade related finance.
The group had gone through some rough moments coupled with it’s split with Barclays Group and this was evident in the increment in the loan from $300 million.
Jason Quinn, Absa Group’s financial director said “The need for this syndicated loan is to fund the growth in our U.S. dollar lending both in South Africa and our Regional Operations, in support of our group strategy.”
According to the loan agreement, the repayment period is two years at a margin of 1.05% per annum. Absa has a one-year extension option available at the borrower’s discretion.
Apart from Stanchart and Bank of America Merrill Lynch, 19 banks from South Africa, the United States, Britain, Germany, Japan, and the UAE participated in the syndication.
Despite receiving the loan facility, ABSA will still carryout layoffs and retrenchments.