In February 2016, the curator of African Bank Limited, Tom Winterboer, launched exchange offer documents to creditors of African Bank to exchange their claims in African Bank for new debt in the “Good Bank.”
We played an integral part in ensuring that communication of the proposed restructure by the Curator to funders of African Bank, through the CSD participants, was timely, clear and concise.
Head of Operations at Strate Iann Seymour-Smith: “We achieved a major milestone as this communication proved highly effective and comprehensive. All funders accepted the proposed restructure in the Money Market environment as well as the Listed Bond Instruments with the result that no investors through inaction remain in a “Bad Bank” environment. We also proposed innovative solutions to encompass Euro Medium Term Note (EMTN) investors and funders outside of the Strate domain in order to create an electronic record of claims against the “Bad Bank” entity. The restructure went ahead on 4 April 2016. To enable this, Strate developed an automated process which was made possible via our new TCS BaNCS Money Market platform. This allowed us to bring functionality to the market in a very short period of time to facilitate this unique event in the South African markets.”
Tom Winterboer, head of Financial Services at PricewaterhouseCoopers and curator of African Bank: “Strate provided exceptional service and dedication to the lengthy and complicated process. Their clearing and settlement was central in facilitating the exchange of debt instruments and the creation of the new bank instruments.”
Approximately R16.6 billion in senior debt and R4.2 billion in subordinated debt was exchanged for new African Bank Limited (ABL) securities Strate’s systems. The new debt securities are now tradable in the over-the-counter market, with all clearing and settlement done by Strate.
This is a significant milestone for African Bank and Strate has been committed to this complex project, the first such transaction of this nature to be processed in South Africa.
Strate’s CEO Monica Singer: “I would like to congratulate African Bank on this significant milestone. The implementation of Strate’s new TCS BaNCS Money Market system provided us with the flexibility to enable the successful processing of this transaction.”