Client name: Bank of Namibia
Deal amount: USD500 million
Deal Title: Bank of Namibia, USD500 million, Hedge Provider
Deal team/area: Global Markets Client Solutions
Deal dates: August 2016
Together with two other hedge providers, Standard Bank provided the Bank of Namibia with a hedging solution to synthetically convert the USD liability to a ZAR liability over the term of the Eurobonds.
The Republic of Namibia, acting through the Bank of Namibia, issued Eurobonds worth USD1.25 billion that will mature in 2021 and 2025, to raise funding for their development budget financing and to support the country’s foreign reserve position. The Bank of Namibia is the central bank in Namibia and is responsible for the control of the money supply, the currency, the institutions of finance and to act as adviser to the Government on key projects. The Bank of Namibia acted as both the adviser and execution agent for Republic of Namibia (Government) with regards to the issuance and hedging of the Eurobonds.
Standard Bank’s hedging strategy eliminated all foreign currency risk, in respect of their coupon payments, for the Bank of Namibia over the term of the Eurobond. The cross currency swap provided a single exchange rate that could be used for budgeting and planning purposes. Standard Bank’s client engagement model resulted in collaboration between the Debt Primary Markets team and Client Solutions team which provided the client with a holistic and seamless solution for raising funding and hedging the associated currency risks.