standard bank monthly market barometer - july 2011

Please refer to the disclaimer at the end of this document.

The annual results of the City of Johannesburg (CoJ) were substantially quali-

fied. We therefore view the results as largely unreliable. Revenue totalling R5.2bn

was either incorrect or unverifiable, while debtors of R2.8bn could not be verified. The

underlying performance of the CoJ is weak; revenue collections are under pressure

and 73.9% of the debtors book has been impaired. However, this may not lead to a

downgrade; Moody’s has stated that an audit qualification might not have a direct

impact on its rating of the CoJ.

Credit metrics weakened in FY:10. The city’s debt burden remains high, while cash

generation has fallen. However, the CoJ’s economy is large; if adequate controls are

put in place, and its accounting and billings problems are remedied, we believe that

the financial situation should improve.

Securitisation issuance to remain high into August. Nitro is expected to return to

market with a new transaction, aiming to raise up to R4bn. This follows the trend of

July, with both Thewini 9 and Blue Granite 2 raising funds (although less than was on

offer). Corporate issuance was robust, with Toyota, Growthpoint and RCS all return-

ing to market.

Sources: Standard Bank Research; Annual reports

Figure 1: CoJ — Interest-bearing liabilities are high, while cash has declined

FICC Research South Africa: Credit: Monthly Market Barometer

July 2011

Research Strategists

Janine Pein* [email protected] +27-11-3788154

Robyn Clements* [email protected] +27-11-3787222

Kuvasha Govender* [email protected] +27-11-3787217

City of Johannesburg — not a pretty picture

-

3,000

6,000

9,000

12,000

FY:06 FY:07 FY:08 FY:09 FY:10

Rm

Cash and cash equivalents Long term interest-bearing debt Short term interest-bearing debt

2

Monthly Market Barometer — July 2011

Credit Research

City of Johannesburg — audit qualification reveals deeper problems

Audit qualification

The City of Johannesburg (CoJ) released final audited results for FY:10 at the end of July — more than a year late. The audi-

tor general has not yet received an annual report; we have therefore based our analysis on the substantially qualified

annual results. Due to the magnitude of the qualification, we highlight the audit findings first:

Revenue raised but not billed amounted to R425m, comprising property rates of R223.4m and service charges of

R201.6m.

A total of R2.2m was included in revenue but was incorrect due to billing errors relating to rates and services. The

auditor “could not quantify the full extent of the errors” because of a lack of information.

Revenue amounting to R732.2m was raised in the wrong period.

Journal entries totalling R1.9bn were processed in order to correct billing errors but these entries could not be

verified. Therefore, it appears that revenue was additionally inflated by R1.9bn.

The difficulties in verifying revenue resulted in unverifiable debtors of R2.8bn.

Due to the size of the qualification, we believe that considerably less reliance can be placed on the revenue and debtors

as disclosed in the annual results.

Statement of comprehensive income

When analysing municipalities, we calculate revenue by excluding all capital items and government grants. On this basis, we

calculate revenue at R18bn — increasing by 21.8% y/y. However, we do not believe that this figure is accurate. The auditor

has highlighted that property rates were potentially overstated by R996.7m, and service charges by R1.6bn, while incorrect

journal entries further inflated revenue by R2.6bn. Therefore, revenue appears to be overstated by R5.2bn. On this basis,

total revenue amounts to R12.8bn, and therefore, revenue actually declined by 13.6% y/y.

The bulk of the city’s revenue is earned from property rates and service charges (for the sale of water and electricity). As per

the financial results, total rates and service charges amounted to R16.2bn (FY:09 – R13.1bn). However, if we exclude R5.2bn

of incorrect and unverifiable revenue, this amount decreases to R11bn; and therefore, revenue from rates and service

charges fell by 15.5%.

We question why the results are so severely misstated. The CoJ has stated that the integration of a new SAP computer

system (implemented during FY:10) with the old system was the primary reason for the billing errors. This is troubling; we be-

lieve that the integration of accounting systems is generally unlikely to cause such substantial errors. The actual cost

of the new system “Project Phakama” was not disclosed; however, we believe that the cost may be around R449.5m (additions

to computer systems, as part of intangible assets).

Rm FY:10 FY:09 % change

Revenue 18,000 14,776 21.8%

EBITDA (1,756) (2,654) 33.9%

EBITDA margin -9.8% -18.0% -

Operating loss before finance charges (2,941) (3,424) 14.1%

Finance costs 1,662 1,232 35.0%

Cash interest cover 2.7x 3.5x -

Sources: Standard Bank Research; Annual results

Table 1: Statement of comprehensive income (as disclosed by the CoJ) — FY:10 highlights

3


Credit Research

We would expect that the lower revenue and high impairment of the debtors book would have suppressed collections. We can-

not determine a concrete collections rate — the unaudited annual report states that collections were 92.7% for FY:10. We find

this unlikely. Other reports suggest a collections rate of 86% or 87%, resulting in an under collection of R600m. We have

used the lower collection rate in our analysis, given the underlying problems with revenue and debt collection (Figure 2). The

city estimates that its collections rate for FY:11 should be 88% .

The muni also receives government grants, which increased by 44% y/y, to R6.8bn (FY:09 – R4.8bn). Part of this funding

(R2.3bn) was granted to fund investment for the 2010 Soccer World Cup. The largest single grant of R3.5bn (FY:09 – R3.1bn)

was provided to assist in the provision of services to poor community members. We expect the CoJ to continue to receive

grants from the government.

If we calculate EBITDA using the numbers the CoJ has reported, the city made a loss of -R1.8bn (FY:09 – -R2.7bn). However,

once we remove the R5.2bn as determined by the auditor, this figure deteriorates to a loss of -R8.1bn (Figure 3).

Figure 2: We have used a lower estimated collections rate of 86% for FY:10


80.0%

83.8%

87.5%

91.3%

95.0%

FY:07 FY:08 FY:09 FY:10Collections rate

-7,100

-4,737

-2,374

-10

2,353

FY:06 FY:07 FY:08 FY:09 FY:10 FY:10a

Rm

-60%

-40%

-20%

0%

20%

EBITDA (LHS) EBITDA margin

Figure 3: EBITDA has become increasingly negative; FY:10a represents the adjusted EBITDA figure


4


Credit Research

Operating expenses increased by 15.1%, to R20.9bn (FY:09 – R18.2bn):

Staff costs increased by 16.4% y/y, to R5.9bn. Salaries and wages comprise the bulk of this figure, and increased by

23.3%, to R4.2bn (FY:09 – R3.4bn). Key executives appear to have largely received increases of between 9% and

19%. The City Manager received the biggest increase of 18.9% y/y, to R1.6m — upon including benefits and a perform-

ance bonus, this increases to R2.1m (FY:09 – R1.9m).

The primary driver behind the 14.5% increase in bulk purchases was the 17.7% growth in electricity costs. We expect

that this charge will continue to increase as Eskom’s tariff hikes are implemented. Electricity charges are the largest

contributor (71%) of total bulk purchases.

The impairment charge remained fairly flat, increasing by only 5.2% y/y, to R1.6bn. However, the impairment charge

before recoveries and write-offs more than doubled, to R2.3bn (FY:09 – R936.3m). In total, 73.9% of the debtors

book is impaired, with the bulk of the impaired accounts (R4.7bn) outstanding for more than 365 days.

Finance charges increased by 35% y/y, to R1.7bn (FY:10) from R1.2bn (FY:09). The city did not provide any further

details on this increase. Total interest bearing liabilities grew by only 7.1% y/y, to R11.1bn (FY:09 – R10.3bn). There-

fore, we do not believe that the growth in debt accounts for this dramatic increase in interest charges. The higher inter-

est charges, coupled with an EBITDA loss, has resulted in weaker credit metrics. Interest coverage (if we remove the

R5.2bn of overstated revenue) is a deeply negative -4.9x (FY:09 – -2.8x).

Statement of financial position and cash flows

Consumer debtors were highlighted by the auditor; R2.8bn was unable to be verified, which equates to 26.2% of total debt-

ors. We also note that the impairment of consumer debtors does not reconcile in the financial statements. Debtors are sig-

nificantly impaired — 73.9% of the total debtors book. In fact, net debtors of R2.9bn is virtually the same amount as the

unverifiable portion.

The impairment includes long-outstanding debt that has not been written off. This is an historical trend; 47.8% (R5bn) of total

debtors fall into the over 365 days bucket. We view this as concerning; these debtors appear largely unrecoverable, and in

our view, they should be written off. However, the current debtors impairment is even more worrisome. Total current debtors

amount to R1.8bn (FY:09 – R1.4bn), with a total impairment of R406m (FY:09 – R40.3m) raised. Therefore, 22.9% of current

debtors have already been impaired. We do not believe that current debtors should be impaired — this hints at even greater

problems in the debtors book.

Debtors totalling R837m (FY:09 – R297.4m) have remained unimpaired despite falling into the 121 to 365 days, and over 365

days buckets. This is also concerning, and follows the trend of severe problems within the consumer debtors book. Only 3.6%

of the total book was written off. Given that a substantial portion of the book is over a year old, we view this as in-

credibly low.

Rm FY:10 FY:09 % change

Interest-bearing liabilities 11,088 10,355 7.1%

Long-term interest-bearing liabilities 10,658 9,124 16.8%

Short-term interest-bearing liabilities 430 1,231 (65.1%)

Gross consumer debtors 10,525 8,307 26.7%

Impairment provision (7,769) (6,117) 27.0%

Cash and cash equivalents 305 666 (54.2%)

Funds from operations (FFO) 3,235 3,781 (14.4%)

Capex (4,628) (6,305) (26.6%)

Free cash flow (FCF) (1,393) (2,524) 44.8%

Interest-bearing-liabilities-to-EBITDA -6.3x -3.9x -

FCF-to-interest-bearing-liabilities -0.13x 0.24x -


Table 2: Financial position and cash flows (as disclosed by the CoJ) — FY:10 highlights

5


Credit Research

Long-term interest-bearing debt grew by 16.6%, to R10.6bn (FY:09 – R9.1bn). This increase was primarily due to a R500m

10-year loan from the Development Bank of SA, and a R1bn loan granted by Nedbank, which falls due in 2018. We believe

that the funding from Nedbank replaces the redemption of the COJ01, which was redeemed on 13 April 2010. This resulted in

a considerable reduction in short-term liabilities, to R430m (FY:10) from R1.2bn (FY:09) (Figure 4). Therefore, the debt matur-

ity profile has lengthened. Credit metrics are weak, especially once the R5.2bn of unverifiable revenue is excluded: the inter-

est-bearing-debt-to-revenue ratio was 86.6% (FY:09 – 70.1%). The city has investments of R2bn (FY:09 – R3.5bn) which are

held as collateral until the liabilities are settled. The largest is a sinking fund of R1.5bn (FY:09 – R2bn) which is allocated to

the redemption of the CoJ bonds. However, this is fairly small in comparison to the R6.6bn (FY:09 – R7.6bn) of bonds out-

standing.

Cash on hand more than halved, declining by 54.2%, to R305m (FY:09 – R666m); the decrease was because R300m was

utilised to repay long-term liabilities. The city generated less cash, with cash from operations declining by 14.4%, to R3.2bn

(FY:10) from R3.8bn (FY:09). However, capex was less, at R4.6bn (FY:09 – R6.3bn) and therefore, free cash flow was less

negative, at -R1.4bn (FY:09 – -R2.5bn).

Ratings

The CoJ is rated Aa3 (Moody’s) and AA- (Fitch). Moody’s has commented that an audit qualification might not result in a

downgrade. Moody’s commented on the ratings in May, stating that the muni’s size, solid budgetary management and con-

trol, and “commitment to financial recovery” support the rating. The high gearing, liquidity challenges and substantial backlogs

in service delivery constrain the rating. The agency views the likelihood of extraordinary support from the SA government as

moderate. However, we believe that this is a fundamental driver behind the ratings. We do not believe that the city has exer-

cised good control — it has not managed its budgeting process well — as evidenced by an EBITDA loss. However, we do

agree that gearing is high and cash flow is under pressure. Despite these challenges and the substantial audit qualification,

we believe that this is unlikely to result in a downgrade. We view the rating as considerably supported by the agency’s

expectation of government support, if required.

Bond performance

The City of Johannesburg issued a new fixed-rate note, the COJ07 (2021, 10.78%) in March 2011, raising R850m, at a spread

of 195 bps over the R208. The credit spread on the bond has tightened by 5 bps over the past three months, to settle at R208

+ 190 bps. There were some moves in the CoJ bonds over the past year, the largest being the COJ06 (2015, 10.82%), which

tightened by 103 bps, to settle at R157 + 172 bps. The spreads on the COJ02 (2016, 11.9%) and the COJ05 (2023, 12.21%)

did not change over the past year. The COJ02 is currently trading at 250 bps over the R157, and the COJ05 is trading at R208

+ 230 bps.

Figure 4: Short-term liabilities have declined


-

3,000

6,000

9,000

12,000

FY:06 FY:07 FY:08 FY:09 FY:10

Rm

Cash and cash equivalents Long term interest-bearing debt Short term interest-bearing debt

6


Credit Research

The newly issued COJ07 traded 49 times, for R2.3m during its first three months in issue. The COJ04 traded 480 times for

R448m, and the COJ06 recorded 56 trades for R527m. Trading activity in the COJ03 and the COJ05 was smaller — the

COJ03 traded eight times for R43m, and the COJ05 traded 37 times for R54m.

Over 6-months, the COJ06 and COJ04 outperformed the ALBI and the equity indices; and the COJ02, COJ03 and COJ05

outperformed the ALBI and the FINI15 and TOP40 equity indices. However, over 12-months, the equity indices outperformed

all the bonds, and only the COJ03 was outperformed by the ALBI (Figure 5).

Concerns

We have many concerns regarding the city’s latest financial statements. The sizable qualification has rendered the annual

results largely unreliable. Although we have adjusted for the qualifications in our analysis, we believe that our results are an

approximation of the actual performance, at best. However, the adjustments do lead us to believe that the underlying perform-

ance of the CoJ is weak. Revenue collections are under pressure, while a significant portion of the debtors book has been

impaired for a great length of time. We believe that controls are inadequate, and we therefore do not place a great deal of reli-

ance on the numbers as reported.

The high debt levels and low cash generation are also sources of concern. The city must improve its revenue collections.

Given the size of the muni, we believe that with adequate controls in place, the financial situation would improve vastly. How-

ever, as these results are more than a year overdue, the possibility exists that these problems may be repeated in FY:11.

COJ05

COJ04

COJ02

COJ06

COJ03

FINDI30

FINI15TOP40

ALBI

-

2

4

7

9

8 14 19 25 30 3512-month return (%)

6-m

onth

ret

urn

(%)

Bonds Equities ALBI

Figure 5: Over the past 12 months, all the bonds underperformed in comparison to the equity indices

Sources: Standard Bank Research; Bloomberg

7


Credit Research

Credit issuance — July 2011

Securitisation issuance remained robust in July, with Thekwini 9 and Blue Granite 2 both raising funding. However, both issues

raised less than the total amount on offer. Nitro is following this trend, aiming to raise up to R4bn on 11 August. Corporate is-

suance picked-up, with several issuers raising funding, Toyota was the largest — issuing two new bonds and raising R760m.

Demand for bank paper remained strong — Standard Bank also raised R1.1bn by tapping two bonds.

Table 3: Issues in August and future credit issues

Issuer Date of issue Bonds Amount on offer Current/ previous auction details

SANRAL 3 August

African Bank 11 August We expect African Bank to issue 6-month CP; African Bank is aiming to raise up to R200m.

Nitro Securitisation 4 Issuer Trust (Nitro 4)

11 August 20 notes R4bn The issuer is aiming to raise up to R4bn across 20 notes with various tenors. The following notes will be on offer:

3-month A1 note is expected to raise R345m. Pric-ing has been set at 3M Jibar + 15 bps;

6-month A2 note is expected to raise R345m and price at 3M Jibar + 30 bps;

9-month A3 note is expected to raise R330m. Pric-ing has been set at 3M Jibar + 40 bps;

1-year A4 note is expected to raise R320m and price at 3M Jibar + 50 bps;


18-month A6 note is expected to raise R290m and price at 3M Jibar + 70 bps ;




30-month A10 note is expected to raise R165m and price at 3M Jibar + 100 bps ;






4-year A16 note is expected to raise R252m and at 3M Jibar + 145 bps;

4-year B note is expected to raise R174m and price at 3M Jibar + 205 bps;

4-year C note is expected to raise R60m and price at 3M Jibar + 320 bps;

4-year D note is expected to raise R65m and price at 3M Jibar + 420 bps; and

4-year E note is expected to raise R86m and price at 3M Jibar + 500 bps.

The pool comprises 37,756 South African auto loans, with an aggregate balance of R3.98bn. The weighted average seasoning of the loans is 19 months, and the weighted average loan balance outstanding is R154k. The transaction is supported by cash totaling R18m.

HWAY23 (2023)

NRA022 (2022, 12.25%)

NRA023 (2023)

NRA028 (2028, 12.25%)

Netcare 5 August We expect Netcare to issue 3-month CP; the issuer is aiming to raise up to R400m.

R300m Details on page 8

Sources: Standard Bank Research: SOE issuance calendar; issuer announcements

8


Credit Research

Issuer Date of issue Bond code Amount raised Details and commentary

Denel 4 July 3-month CP R590m The paper priced at 3M Jibar + 10 bps.

SANRAL 6 July HWAY23 (2023)

NRA022 (2022,12.25%)

NRA023 (2023)

NRA028 (2028,12.25%)

R300m The issue was allocated as follows:

The HWAY23 raised R105m and priced at R197 + 22 bps;

The NRA022 raised R82m and priced at 110 bps over the R208;

The NRA023 raised R3m and priced at 43 bps over the R197; and

The NRA028 raised R110m and priced at R186 + 113.5 bps.

Thekwini 9 6 July Six notes R1.6bn The issuer was aiming to raise up to R2bn. The issue was allocated as follows:

The THE9A1, rated Aa2/Aaa.za, raised R370m and priced at 121 bps over 3M Jibar; wider than the pricing guidance of 100 bps to 115 bps over 3M Jibar;

The THE9A2, rated Aa2/Aaa.za, raised R252m and priced at 3M Jibar + 135 bps; the top end of the pricing guidance;

The THE9A3, rated Aa2/Aaa.za, raised R816m. The note priced at 3M Jibar + 145 bps — the top end of the pricing guidance;

The THE9B, rated Baa2/A2.za, raised R69m and priced at 200 bps over 3M Jibar (the top end of the pricing guidance);

The THE9C, rated Ba3/Baa3.za, raised R73.5m. The note priced at 3M Jibar + 280 bps, wider than the pricing guidance of 210 bps to 240 bps over 3M Jibar; and

The unrated THE9D raised R19.5m and priced at 3M Jibar + 675 bps. Pricing guidance was set at 630 bps to 700 bps over 3M Jibar.

All the notes have 5-year tenors. The pool comprises 3,208 loans, with a total current portfolio balance of R1.8bn. The current weighted average LTV stands at 64.09% and the PTI ratio is 18.47%.

RCS Investment Holdings (Pty) Ltd

12 July RCSB02 (2013)

RCSB03 (2016)

R500m The issue comprised:

The RCSB02, which raised R200m and priced at 3M Jibar + 203 bps; and

The RCSB03, which raised R300m and priced at 370 bps over 3M Jibar.

Growthpoint 13 July GRT03 (2015) R500m The note priced at 145 bps over 3M Jibar.

Eskom 13 July ES23 (2023, 10%)

ES26 (2026, 7.85%)

R300m Demand was robust, with 10 bids totalling R660m:

The ES23 raised R200m, and priced at 57.5 bps over the R208. The note swapped out at approximately 70 bps over 3M Jibar; and

The ES26 raised R100m, and priced at R186 + 57.5 bps. The note swapped out at approximately 82 bps over 3M Jibar.

DBSA 14 July DV23 (2023, 10%) R421m The note priced at 91 bps over the R186. The auction received bids totalling R621m, with nine bids allocated in full.

Table 4: Previous credit issues and taps

Sources: Standard Bank Research; issuer announcements; JSE

9


Credit Research


Real People In-vestments Hold-

19 July RPI01 (2016) R200m The CPI-linked note has a coupon of 5.25% and was privately placed.

TCTA 21 July WS04 (2016, 15.5%)

WSP2 (2017, 9%)

WSP5 (2021, 9%)

R935m Demand was robust, with bids of R1.4bn received. The switch was allocated as follows:

R435m (the issuer was aiming for R300m) was switched from the WS04 bonds into WSP2 bonds; and

R500m of the WS04 bonds were switched into WSP5 bonds.

The WSP2 swapped out at approximately 86 bps over 3M Jibar, and the WSP5 swapped out at approximately 3M Jibar + 71 bps.

Calgro M3 Devel-opment (Pty) Ltd

22 July CGR7 (2014)

CGR8 (2015)

R50m The issue comprised:

The CGR7 raised R22.5m and priced at 800 bps over 3M Jibar; and

The CGR8 raised R22.5m and priced at 3M Jibar + 1,000 bps.

Toyota 25 July TFS83 (2015)

TFS84 (2016, 8.7%)

R760m The issue received bids totalling R1.8bn, and was allo-cated as follows:

The floating-rate TFS83 raised R260m, and priced at 3M Jibar + 85 bps; and

The fixed-rate TFS84 raised R500m, and priced at R157 + 130 bps.

Transnet 26 July 6- and 12-month CP R200m Bids of R400m were received. The issue was allocated as follows:

R100m of 6-month paper, which priced at 4 bps over 6M Jibar; and

R100m of 12-month paper, which priced at 10 bps over 12M Jibar.

Standard Bank 26 and 27 July SBSi12 (2017)

SBS19 (2021, 10.18%)

R1.1bn The following notes were tapped:

The inflation-linked SBSi12 raised R650m, and priced at 70 bps over the R211; and

The fixed-rate SBS19 raised R400m, and priced at R208 + 165 bps.

Blue Granite In-vestments No. 2

27 July Six notes R2.2bn The issuer was aiming to raise up to R2.4bn. The issue was allocated as follows:

The A1 note, rated Aa2/Aaa.za, raised R225m and priced at 3M Jibar + 140 bps. The pricing was wider than the guidance of 110 bps to 135 bps;

The A2 note, rated Aa2/Aaa.za, raised R600m, and priced at 145 bps over 3M Jibar; the top end of pricing guidance;

The A3, Aa2/Aaa.za -rated note, raised R1.1bn. The note priced at 3M Jibar + 160 bps; the top end of the pricing guidance;

The B mezzanine note, rated Baa1/A1.za, raised R118m, and priced at 210 bps over 3M Jibar (the top end of the pricing guidance);

The C mezzanine note, rated Ba1/Baa1.za, raised R77m. The note priced at 3M Jibar + 260 bps; the top end of the pricing guidance; and

The D junior note, rated B2/Ba2.za, raised R71m, and priced at 400 bps over 3M Jibar; at the top end of the pricing guidance.

The pool comprises 4,324 home loans, with an aggre-gate balance of R2.2bn. The current weighted average LTV is 67.3% and the PTI ratio is 16.99%. The average seasoning of the pool is 46 months.

Table 4: Previous credit issues and taps (continued)

Sources: Standard Bank Research; Issuer announcements; JSE

10


Credit Research


Bidvest 27 July 3-month CP R1.5bn The paper priced at 22 bps over 3M Jibar.

Denel 28 July 3-month CP R550m The paper priced at 3M Jibar + 10 bps.

Growthpoint Prop-erties Ltd

28 July 3-month CP R300m The paper, which is rated P-2.za, priced at 38 bps over 3M Jibar.

Table 4: Previous credit issues and taps (continued)

Sources: Standard Bank Research; Issuer announcements; JSE

Table 5: Coupons and redemptions due in Q3:11

Sources: Standard Bank Research; JSE

Coupons due (Q3:11)

Government R4.2bn

Corporate R1.1bn

Financial R484.7m

Municipal R43.0m

SOE R896.8m

Securitisation R208.6m

R11.4bn

R381.3m

R2.5bn

R259.8m

R1.3bn

R289.9m

R1.6bn

R119.8m

R446.7m

-

R2.0bn

R243.4m

July August September

Redemptions (Q3:11) Bond code Maturity Amount

African Bank ABL5 11 August 2011 R597.7m

Mercedes Benz SA MBF04 22 August 2011 R165m

Nedbank NILB6 29 August 2011 R130m

Nedbank NBRN1 31 August 2011 R44m

Absa ABN01 15 September 2011 R4m

Standard Bank SBR002 15 September 2011 R475m

INCA INJ01 21 September 2011 R100m

FirstRand FRBI03 30 September 2011 R1.1bn

Absa ABCL3 30 September 2011 R40m

Securitisation - - R2.0bn

11


Credit Research

Monthly spread movers — July 2011

We have seen very little credit spread activity in July, only 35 bonds recorded moves, while 127 remaining flat. However, we

continue to see selective large moves tighter; certain bonds are trading at extremely tight (and occasionally distorted) levels.

On the whole, asset swap spreads widened across 124 bonds, with 28 tightening and seven remaining static.

Trading volumes remained fairly stable m/m, with 2,684 trades for R15.6bn. As is the norm, the largest amount of trading activ-

ity occurred in the AAA space. Both DBSA and Eskom had high trading volumes but this was outweighed by the R4.8bn of

trades across TCTA’s bonds. New issuance assisted volumes in the AA space, with Toyota raising R760m. Within banks,

trades totalled R3bn; the largest was the SBS19, with trades of R904m.

The CBL08 was the largest mover of the month, tightening by 250 bps. The bond is now pricing more in line with Capitec’s

other bonds, and therefore this tightening action appears reasonable. However, we believe the SMF3 is market anomaly, as

the bond is pricing at 30 bps over its benchmark. Given Sappi’s underlying credit quality, and the pricing of the other Sappi

bonds — with the recently issued SSA01 (2016, 12.13%) pricing at R203 + 150 bps — the pricing on this bond is out of line

with the market. We view the SMF3 as extremely mis-priced at its current spread. However, we note that the bond did trade at

this level.

Top 10 movers Credit spread

movement ASW movement Spread to benchmark Trading activity

CBL08 -250 -222 R203 + 250 bps R20.0m

SMF3 -95 -105 R206 + 30 bps R161.8m

FRX31 -58 -26 R157 + 75 bps -

COJ04 -20 -10 R203 + 200 bps R254.3m

SBS4 3 8 R157 + 263 bps R422.7m

NBK8A 3 14 R206 + 131 bps -

COJ02 3 15 R157 + 253 bps -

WSP4 5 8 R204 + 74 bps R1.2m

BAW11 21 0 R204 + 168 bps R53.3m

FRX15 -18 1 R157 + 75 bps R50.3m

Table 6: Top 10 credit spread and asset swap spread movers — July 2011

Sources: JSE, Standard Bank Research


Figure 6: Credit spread movers (July) Figure 7: Asset swap spread movers (July)

-300

-200

-100

0

100

CBL08

SMF3

FRX31

COJ0

4

FRX15

SBS4

NBK8A

COJ0

2

WSP4

BAW11

bps

Credit spread movers Interpolated spread movers

-264

-176

-88

0

88

CBL08

SMF3

FRX31

INJ0

1

OM

N01

MET0

1

ABL11A

BID01

T018

CBL06

bps

Credit spread movers Asset sw ap spread movers


12


Credit Research

Rating agency actions — July 2011

Issuer Rating

Previous

rating

Rating

action Commentary

Transnet BBB+/F2

BBB-/F3

BBB+/F2

BBB-/F3

Fitch has affirmed Transnet’s local and foreign ratings at BBB+/F2 and BBB-/F3, respec-tively. The national scale ratings were also affirmed at AAA(zaf) (government guaranteed debt) and AA-(zaf) (senior unsecured debt). The outlook is stable.

Agency view: The agency views Transnet’s role in SA as critical because it has a monopoly position in freight rail, ports and pipelines. The ratings reflect its operational, legal and strategic ties to the SA government. Transnet is rated on a top-down basis; therefore, any change in the sovereign’s rating or the level of government support is likely to impact on the ratings. Fitch expects Transnet’s standalone credit profile to weaken over the next three to five years because of its R110.6bn capex programme. The programme is expected to be funded by both internally generated cash and long-term debt. The agency expects free cash flow to remain negative. However, higher tariffs, improved productivity and efficiency, and cost management could reduce the impact of the capex programme on cash flow. The rating agency does not expect the government to guarantee new debt; currently, R9.5bn of the group’s debt (of R60bn) is guaranteed by the government.

Standard Bank Research view: We expect Transnet to remain cash generative, and we expect the entity should be able to fund at least part of its capex by cash. We also expect the SA government will support the entity, if required. Therefore, we agree with the rating action.

Vodacom zaAA-/zaA-1

- - S&P has assigned Vodacom a national scale rating of zaAA-/zaA-1.

Agency view: S&P views Vodacom as a leading mobile operator in SA’s mature teleco’s market. The group generates robust free cash flow and has a moderate amount of debt. S&P expects Vodacom’s SA operations to remain resilient over the next 12 months, maintaining a strong market position, robust profitability and solid cash flows. The agency also expects the group to carefully manage risks relating to its international operations, and to maintain a conserva-tive capital structure commensurate with its rating. The rating is constrained by intensifying competition and increasing regulatory pressures in SA, large capex requirements, and above-average risks (political, operational and currency) in Vodacom’s international mar-kets.

Standard Bank Research view: Vodacom is a prominent player in the SA teleco’s market. The ratings appear appropriate for the level of risk associated with the industry.

Blue Granite Investments No. 2 (Pty) Ltd

- - - Blue Granite Investments No. 2 (Pty) Ltd’s residential mortgage backed notes have been assigned provisional ratings by Moody’s as follows:

The class A1 notes were assigned ratings of (P)Aa2 (sf) /(P)Aaa.za (sf);



The class B notes were assigned ratings of (P)Baa1 (sf) /(P)A1.za (sf);

The class C notes were assigned ratings of (P)Ba1 (sf) /(P)Baa1.za (sf); and

The class D notes were assigned ratings of (P)B2 (sf) /(P)Ba2.za (sf).

Agency view: The provisional ratings take into account the credit quality of the underlying mortgage loan pool, the expected loss of the portfolio, the transaction structure, and any legal considera-tions underpinning the agency’s assessment model. The notes are supported by prime mortgage loans secured by residential properties in South Africa and four separate cash reserve funds. Moody’s will assign final ratings to the notes once the transaction details have been finalised.

Standard Bank Research view: The portfolio is well seasoned, and we believe this has been taken into account in assigning ratings to the transaction.

Sources: Standard Bank Research; Fitch Ratings; Standard & Poor’s; Moody’s Investor Services

13


Credit Research

Rating agency actions — July 2011 (continued)

Issuer Rating

Previous

rating

Rating

action Commentary

Basil Read A-/A1- A/A1- GCR has placed Basil Read’s A-/A1- rating on a ratings watch.

Agency view: The challenging conditions in the construction industry were the primary reason for the action. The scarcity of new contracts and tender delays from the government also contrib-uted to the action. The agency views the lower margins (partially due to rising input costs) as concerning. However, the group’s core roads division (which accounts for 66% of total earnings) aided the group’s robust net profits. The group has expanded its operations into mining through TWP (its mining subsidiary). In FY:10, the mining division grew its order book to R9.1bn; R4bn of which relates to projects in FY:11.

Standard Bank Research view: All players in the construction sector appear to be under pressure. Within this context, we view the action as appropriate.

Eskom A

AAA(zaf)/F1+(zaf)

A

AAA(zaf)/F1+(zaf)

Fitch has affirmed Eskom’s long-term local currency rating at A, and its national scale rating at AAA(zaf)/F1+(zaf). The outlook is stable.

Agency view: Fitch has stated that any rating action taken on the sovereign would result in a similar action on the utility. The government increased its support to Eskom during FY:11. Fitch believes that higher levels of transparency from the government and regulators should allow Eskom’s standalone credit profile to normalise — this could result in an international investment-grade rating over the medium term. Eskom is strategically important to South Africa, supplying approximately 95% of the country’s electricity requirements. The utility's revenue increased by 28.6% during FY:11, boosted by higher electricity tariffs. Fitch ex-pects the higher tariffs and lower operational costs to aid Eskom’s financial profile over the medium term.

Standard Bank Research view: Eskom is aiming to achieve stand-alone investment grade ratings by 2014/2015. We be-lieve this will be extremely difficult to achieve, and unlikely to occur in the medium term. We view Eskom’s ratings as supported by the SA government but we disagree with Fitch’s comments.

Impala Platinum Holding Ltd (Implats)

With-drawn

BBB/F3

A+(zaf)/F1(zaf)

- Fitch has affirmed and withdrawn Implats’ BBB/F3 global foreign currency rating and its A+(zaf)/F1(zaf) national scale rating.

Agency view: Implats will not continue to participate in the agency’s credit rating process.

Standard Bank Research view: The SA Home Loans portfolio has historically performed well. The transaction has a WA LTV of 64.09% and a PTI ratio of 18.47%. We view the originator as robust, and expect the transaction to be well-managed. Therefore, the ratings appear appropriate.

Thekwini Fund 9 (Pty) Ltd

Moody’s has assigned final ratings to Thekwini Fund 9’s residential mortgage backed notes as follows:

The THE9A1 note was rated Aa2 (sf) /Aaa.za (sf);



The THE9B note was rated Baa2 (sf) /A2.za (sf); and

The THE9C note was rated Ba3 (sf) /Baa3.za (sf). Moody’s has withdrawn the provisional rating for the Class A4 note, which was not issued.

Agency view: The ratings take into account the credit quality of the underlying mortgage pool, the ex-pected loss of the portfolio, the transaction structure, and any legal considerations as as-sessed by Moody’s. The definitive ratings also take into account the expected loss relating to the 5-year tenor of the notes. The notes are supported by prime mortgage loans which are secured by residential properties in South Africa.


14


Credit Research


Issuer Rating

Previous

rating

Rating

action Commentary

Steinhoff In-ternational Holdings Lim-ited

A-(zaf)/F2(zaf)

A-(zaf)/F2(zaf)

- Fitch has commented on the sale of Steinhoff SA’s retail business to the JD Group.

Agency view: The transaction is not expected to have an effect on Steinhoff’s rating of A-(zaf)/F2(zaf). The sale of Steinhoff’s SA retail business, which includes its automobile retail and building materials businesses, amounted to R3.2bn — with R702m be funded by cash, and the remaining R2.5bn paid via JD Group shares.

JD Group is, in turn, waiting for the Polish Competition Authorities’ approval for the im-pending sale of its Polish furniture retail business to an associate of the Steinhoff group, valued at R134m. Fitch views Steinhoff’s new business developments and its market and strategic re-profiling positively. The agency also noted that the Conforama transaction would increase its European presence. Although Fitch expects neither transaction to have a significant impact on Steinhoff’s current leverage profile, the agency believes that the group’s net adjusted leverage position would moderate once the deals have been final-ised.

Standard Bank Research view: We view these transactions positively, and do not believe the rating should be impacted.

Absa Group Ltd (Absa) and Absa Bank Ltd

A

AAA(zaf)/F1+(zaf)

A

AAA(zaf)/F1+(zaf)

Fitch has affirmed Absa’s and Absa Bank’s global rating at A, and national scale rating at AAA(zaf)/F1+(zaf). The outlook is stable.

Agency view: The ratings take into account the high likelihood of support from Absa’s parent (Barclays Bank plc). The Viability Rating (VR) of bbb+ takes into account the bank’s position in the SA market and its adequate capital levels. However, a decline in asset quality (which the agency believes could continue in the medium term) restricts the VR. Fitch noted that revenue has been pressurised in recent years because interest rates are low and loan book growth has been muted. However, earnings have remained constant; net interest income has been aided by the group’s hedging activities. Although the agency expects revenue growth to remain soft in FY:11, earnings may grow because of lower impairment charges. However, rising costs could negatively impact earnings growth. Fitch views Absa and Absa Bank’s core Tier 1 capital levels as “acceptable” in light of poorer asset quality and the performance of the mortgage book.

Standard Bank Research view: Absa’s performance has been pressurised by the weak lending environment. However, we view the bank as well capitalised. We expect Absa to continue to perform reasonably well under the currently strained economic conditions. Therefore, the affirmation appears appropriate.

Liberty Group Limited

AA(zaf) (IFS)

AA-(zaf)

A+(zaf)

AA(zaf) (IFS)

AA-(zaf)

A+(zaf)

Fitch has changed Liberty’s outlook to stable, from negative. The group’s Insurer Finan-cial Strength (IFS) rating was affirmed at AA(zaf), the national scale rating at AA-(zaf), and the subordinated debt rating at A+(zaf).

Agency view: The change in outlook stems from an improvement in the management of policyholder persistency; persistency levels were more robust than expected in FY:10, even though actuarial assumptions were not materially altered. However, new business margins re-mained low because the group has focused on writing higher quality business, which has resulted in lower volumes. Relatively higher acquisition costs have also impacted on new business margins. However, the agency expects these margins to improve somewhat in H2:11 because new actuarial assumptions are likely to take improved persistency levels into account. The ratings are supported by Liberty’s strong capital profile, its es-tablished position and diverse distribution networks in SA, and its prudent risk manage-ment practices. The group’s success with Standard Bank in the bancassurance business also supports the rating. However, Liberty is exposed to volatility in investment markets which constrains its rating. Although the agency does not view an upgrade in the short- to medium term as likely, an upgrade could occur if new business margins increase, vol-umes improve, and capital levels remain robust.

Standard Bank Research view: The outlook has been adjusted because the agency believes Liberty’s performance is improving. Liberty’s performance has been muted; we agree with the agency’s statement that an upgrade is unlikely in the short-to-medium term.


15


Credit Research


Issuer Rating

Previous

rating

Rating

action Commentary

Standard Bank of South Africa (SBSA)

BBB/A-2 BBBpi - S&P has converted SBSA’s BBBpi counterparty rating to an unsolicited rating of BBB/A-2. The outlook is positive.

Agency view: The conversion stems from a change in the agency’s structured finance criteria for coun-terparty and supporting obligations. The unsolicited rating will form part of the credit rating of Blue Granite’s class A notes. The rating is supported by SBSA’s position in the SA banking industry and its position in the Standard Bank Group — the largest financial ser-vices group in Africa. SBSA’s stable funding from deposits and improving asset quality and earnings also support the rating. However, S&P noted that the rating is constrained by the group’s dependence on short-term corporate funding and the weak performance of its mortgage portfolio. The agency expects the group’s financial profile may improve as economic conditions and the housing market have shown signs of improvement, which is taken into account with a positive outlook. The agency expects operating and risk costs to decline slowly in 2011/12, which could boost asset quality and earnings.

Standard Bank Research view: The agency has highlighted SBSA’s strengths and challenges, and we view the rating as appropriate.

Prime Realty Obligors Packaged Securities Series 2 – Class A notes

AAA(zaf) AAA(zaf) Fitch has affirmed Prime Realty Obligors Packaged Securities Series 2’s class A2 notes at AAA(zaf); the outlook is stable. Currently, R621m is outstanding on these notes.

Agency view: The transaction was restructured on 4 January; four outstanding loans were repaid and the proceeds were used to redeem the class A1, B and C notes for R941m. Two loans remain in the portfolio. The value of the portfolio has increased by 57% since 2007; there-fore, the LTV ratio has increased to 31.2%. However, Fitch does not rely on the LTV ratio to assess the rating. The debt yield (of >20%) is viewed positively by the agency. The early repayments of the loans has caused the weighted average interest coverage ratio to decline; however, it is still robust at 2.54x.

Standard Bank Research view: The transaction is substantially smaller, and therefore the affirmation appears acceptable.

Standard Bank of SA (SBSA)

Standard Bank Group (SBG)

BBB+/F2

AA(zaf)/F1+(zaf)

BBB+/F2

AA(zaf)/F1+(zaf)

Fitch has taken the following rating actions on SBSA’s and SBG’s ratings:

SBSA’s foreign currency Issuer Default Ratings (IDR) were affirmed at BBB+/F2;

SBSA’s local currency IDR was affirmed at BBB+;

SBSA’s AA(zaf)/F1+(zaf) national ratings were affirmed;

SBSA’s senior unsecured debt ratings were affirmed at BBB+/F2;

SBG was assigned foreign currency IDRs of BBB+/F2;

SBG was assigned a local currency IDR of BBB+;

SBG was assigned a Support Rating Floor of NF (no floor);

SBG’s national short-term rating of F1+(zaf) was affirmed; and

SBSA and SBG’s bbb+ viability ratings were affirmed.

The outlook on all ratings is stable. The viability ratings of SBSA and SBG are the same, at bbb+, due to the SARB’s consistent supervision of both entities, as both group’s enti-ties are highly integrated.

Agency view: SBSA’s entrenched position in SA, the consistent profitability in its core operations, and capital levels were noted as positive rating contributors. These factors are offset by weak-ening asset quality trends, which may continue into the medium term. However, the agency believes that this trend may have reached a peak after slowing during FY:10. The ratings also account for the group’s risky global emerging market banking operations. In FY:10, SBSA’s earnings increased, significantly aided by profits from Liberty.

Standard Bank Research view: The ratings are commensurate with Standard Bank’s performance and appear appropri-ate.


16


Credit Research


Issuer Rating

Previous

rating

Rating

action Commentary

Nitro Securiti-sation 4 Is-suer Trust

Moody’s has assigned provisional ratings to the three tranches of Nitro 4 asset backed notes as follows:

The Class A1 to A14 notes, which are expected to raise a total of R3.2bn, were as-signed ratings of (P)Aa2 (sf) / (P)Aaa.za (sf);

The Class B notes, which are expected to raise R286m, were assigned ratings of (P)Baa2 (sf) / (P)A1.za (sf); and

The Class C notes, which are expected to raise R140m, were assigned ratings of (P)Ba2 (sf) / (P)Baa1.za (sf).

Agency view: The provisional ratings take into account eight years of historical performance data, credit enhancements supplied by the arrears reserve, the subordination of the notes, the liquid-ity support available in the transaction, and any legal considerations underpinning the transaction. The notes are supported by SA auto loans, originated through dealerships. Moody’s will assign final ratings to the notes once the transaction details have been final-ised.

Standard Bank Research view: The ratings take into account the underlying assets and therefore appear appropriate for the level of risk in the transaction.

Mondi plc Baa3 Baa3 Moody’s has changed the outlook on Mondi’s Baa3 domestic currency issuer rating to positive, from stable, following the release of the group’s H1:11 results. Mondi Finance plc’s rating remains at Baa3/P-3.

Agency view: Mondi’s financial metrics have improved because prices have increased over time, and demand and supply fundamentals for paper products in Europe have equalised. The group’s position within its rating band is strong because of its diversified business (both geographically and by products), reduced debt levels, strong market position, and consis-tently strong financial metrics. Moody’s expects Mondi may continue to produce high cash flows due to improved working capital management and lower capex spend.

Standard Bank Research view: The rating factors in the risks associated with the paper industry and therefore appear appropriate.

Savcio Hold-ings

B+ B+ S&P has placed Savcio’s B+ rating on CreditWatch with developing implications, as shareholders intend to sell the company to Actom.

Agency view: Savcio and Actom have entered into a binding sales agreement, involving a complete sale of Savcio’s issued share capital to Actom. Savcio’s ratings will be withdrawn if the debt is repaid under the transaction. Savcio currently has notes outstanding that may be called in February 2012. The agreement is pending regulatory approval. S&P will assess the method of funding to be used for the transaction, and the combined leverage of Savcio and Actom on completion of the transaction. The agency expects to conclude its assessment once the details of the transaction have been finalised.

Standard Bank Research view: We cannot comment on the rating action until the transaction details have been finalised.


17


Credit Research

Sources: Standard Bank Research; JSE Sources: Standard Bank Research; JSE

Forecast vs. actual issuance

Debt capital market issuance

2.7%

33.2%

3.9%

31.4%

10.6%

2.4%

6.8%

8.9%

Municipal Government State Ow ned EnterprisesWater Authorities Financial SectorCorporates Commercial PaperCredit Linked Notes Securitisation

;

Total issuance per sector

0

25

50

75

100

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Rbn

Credit Securitisation

Total annual credit issuance

0

9

18

26

35

SOEMunicipalities

CorporatesFinancials

Securitisation

Rbn

2011 forecast 2011 YTD


0

16

32

48

64

Dec-02 Oct-05 Aug-08 Jun-11

Rbn

-

7

14

21

28Rbn

Issued/month (RHS) Outstanding issuance

CP issuance

18


Credit Research

Credit and asset swap spreads


Asset swap spreads — sector

SA Jibar and repo rates


Credit spreads — sector

SA swap rates

Sources: Standard Bank Research; JSE; iNet


-

70

140

210

280

Jan-03 Sep-04 May-06 Jan-08 Oct-09 Jun-11

bps

SOE Financials Corporates

-100

0

100

200

300


bps

SOE Financials Corporate

3

6

9

12

15

Jan-08 Sep-08 Jun-09 Feb-10 Nov-10 Jul-11

%

1yr 2yr 5yr 10yr

4

7

10

13

16


%

Repo 1m Jibar 3m Jibar

6m Jibar 12m Jibar

Credit spreads — rating Asset swap spreads — rating

0

70

140

210

280


bps

AAA AA A

-100

0

100

200

300


bps

AAA AA A

Sources: Standard Bank Research; JSE Sources: Standard Bank Research; JSE; iNet

19


Credit Research

Credit spreads (to government benchmarks)

AAA

A

AA

Financial sector paper



Note: Data as at 29 July 2011

-160

0

160

320

480

640

Jan-10 Oct-11 Jun-13 Mar-15 Nov-16 Aug-18

bps

Spread To Benchmark

-160

0

160

320

480

May-10 May-17 May-24 May-31 May-38 May-45

bps

Spread To Benchmark

-120

0

120

240

360

Mar-10 Feb-15 Jan-20 Dec-24 Nov-29 Nov-34

bps

Spread To Benchmark

-210

0

210

420

630

May-10 May-17 May-24 Jun-31 Jun-38 Jun-45

bps

AAA AA A

20


Credit Research

Coupons and redemptions 2011

Upcoming coupon payments per sector – 2011



Future redemptions

-

4

8

11

15

Janu

ary

Mar

chM

ay July

Septe

mbe

r

Novem

ber

Rbn

Government Corporate Securitisation

Redemptions per sector – 2011


-

3.5

7.0

10.5

14.0

Jan Mar May Jul Sep Nov

Rbn

Corporate Govi Securitisation

-

38

75

113

150

2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036

Rbn

Government Corporate Securitisation

21


Credit Research

International debt capital markets

Sovereign credit default swap spreads1 iTraxx Indices2

Sources: Standard Bank Research; Bloomberg Sources: Standard Bank Research; Bloomberg

Sources: Standard Bank Research; Bloomberg Sources: Standard Bank Research; Bloomberg

EMBI vs. SA sovereign CDS1 USD rates

0 62.5 125 187.5 250

Brazil

Bulgaria

China

Kazakhstan

Mexico

Russia

South Africa

Thailand

Turkey

bps01-Jul-11 31-Jul-11

-

300

600

900

1,200


price

Europe HiVolCrossover Senior FinancialsSubordinated Financials

0

235

470

705

940

Apr-07 Feb-08 Dec-08 Nov-09 Sep-10 Jul-11

bps

SA Sovereign CDS EMBI Global Spread

0

2

3

5

6

Dec-06 Nov-07 Oct-08 Sep-09 Aug-10 Jul-11

%

USD LIBOR USD Overnight Indexed Sw ap (OIS)

Notes:

1. Sovereign CDS: Cost of protection against default by sovereign entity. Higher value denotes increased default worry with protection correspondingly more ex-pensive.

2. iTraxx: Basket of credit derivatives representing different segments of debt in Europe. Higher values imply increased cost to buying protection. Graph above is a generic Bloomberg quote, combining the various iTraxx indices.

22


Credit Research

Fixed-rate notes per rating band

Spread to benchmark (bps) Asset swap spreads

(bps) Liquidity

Issuer Bond

code

Summary

rating

Issue size

(Rbn) Coupon (%) Issue date

Maturity

date

Govi

Benchmark At issue 29-Jul

1-month

change 29-Jul

1-month

change

No of

trades

Nominal

traded (Rm)

AAA

African Dev. Bank ADB01S6 AAA 1.00 9.04 14-Dec-07 14-Dec-12 R155 - -52 0 -119 5 0 0.00

ADB02S6 AAA 0.20 8.98 14-Dec-07 14-Dec-12 R155 - -58 0 -126 5 0 0.00

ADB03S6 AAA 2.00 9.53 09-Apr-08 09-Apr-13 R155 7 -13 0 -94 8 0 0.00

DBSA DV13 AAA 1.60 10.06 25-Aug-08 25-Aug-13 R157 - 90 0 189 11 0 0.00

DV21 AAA 1.00 15.00 31-May-00 15-Jun-16 R157 68 90 0 103 14 24 14.00

DV22 AAA 7.33 9.45 07-Feb-08 07-Feb-20 R207 90 90 0 116 8 49 83.25

DV23 AAA 6.66 10.00 21-Feb-03 27-Feb-23 R186 - 92 1 139 15 86 1,203.78

Eagle EGL01 AAA 0.31 9.96 10-Jun-03 31-Jul-12 R155 85 308 0 0 0 3 0.14

EGL02 AAA 0.15 10.02 02-Apr-04 30-Nov-11 R155 75 313 0 0 0 3 0.21

Eskom E170 AAA 11.81 13.50 01-Jul-92 01-Aug-20 R203 - 66 2 75 7 11 42.35

ES155 AAA 4.21 7.75 30-Aug-10 30-Aug-15 R157 56 47 -1 63 15 42 494.71

ES185 AAA 7.95 9.25 20-Apr-09 20-Apr-18 R204 66 47 -1 85 5 67 572.37

ES235 AAA 11.90 10.00 25-Jan-10 25-Jan-23 R208 - 57 -1 83 6 0 0.00

ES265 AAA 14.51 7.85 02-Apr-07 02-Apr-26 R186 - 57 -1 95 12 87 560.87

ES335 AAA 14.99 7.50 20-Mar-06 15-Sep-33 R209 - 58 -2 137 15 52 309.40

Komati River KW015 AAA 0.38 13.50 27-Oct-97 31-Oct-27 R186 - 18 0 90 18 0 0.00

SA Roads HWAY205 AAA 7.03 9.75 11-Aug-09 31-Jul-20 R207 75 57 0 82 8 48 8.98

HWAY345 AAA 2.60 9.25 11-Aug-09 31-Jul-34 R209 72 57 0 157 19 17 3.27

HWAY355 AAA 0.65 9.25 20-Aug-10 31-Jul-35 R209 52 57 0 159 19 0 0.00

SZ185 AAA 1.91 12.50 04-Jun-96 30-Sep-15 R157 83 55 0 80 17 2 0.00

SZ255 AAA 4.01 9.00 10-Sep-03 30-Sep-25 R186 - 54 0 100 14 6 12.00

TCTA WS045 AAA 8.43 12.50 20-Mar-01 30-May-16 R157 40 38 -2 41 12 111 2,593.99

WSP15 AAA 0.37 9.00 28-May-03 28-May-15 R157 - 55 0 83 18 2 28.60

WSP25 AAA 0.92 9.00 28-May-03 28-May-17 R203 - 61 -1 93 7 57 1,035.29

WSP35 AAA 0.40 9.00 28-May-03 28-May-19 R207 - 44 -5 77 4 3 1.00

WSP45 AAA 0.40 9.00 28-May-03 28-May-20 R204 - 74 5 86 8 3 1.20

WSP55 AAA 1.80 9.00 28-May-03 28-May-21 R207 - 63 0 81 8 23 1,184.25

Transnet T0185 AAA 6.00 10.75 06-Jul-04 15-Jul-14 R201 - 30 0 57 21 0 0.00

AA

Absa AB051 AA 1.50 8.75 01-Sep-05 01-Sep-12 R201 63 40 0 145 2 8 14.00

AB061 AA 2.00 8.10 27-Mar-06 27-Mar-15 R157 68 145 0 174 18 47 32.59

AB071 AA 1.73 8.80 07-Mar-07 07-Mar-14 R201 110 160 0 198 18 6 12.55

AB091 9 AA 0.60 10.28 03-May-10 03-May-17 R203 - 175 -40 210 -28 0 0.00

ABS53 AA+ 2.23 8.30 23-Apr-07 01-May-15 R157 - 125 0 152 18 37 14.38

ABS63 AA+ 0.49 8.20 18-Jun-07 11-Jun-20 R207 - 165 0 172 8 51 278.55

ABS73 AA+ 0.30 8.80 11-Sep-07 11-Sep-26 R186 80 185 0 210 13 13 4.82

ABS93 AA+ 0.30 9.37 17-Mar-11 17-Mar-16 R157 150 150 0 152 14 9 6.20

ABS103 AA+ 0.227 9.88 17-Mar-11 17-Mar-18 R203 135 135 0 155 7 17 2.62

ACSA AIR01 AA- 2.00 8.58 15-Mar-07 15-Mar-19 R204 100 155 0 169 5 22 0.87

AIR02 AA- 1.71 11.68 30-Apr-08 30-Apr-23 R186 240 180 0 238 15 9 3.60

AIR03 AA- 1.73 10.86 09-Mar-09 09-Mar-16 R157 280 135 -2 144 13 20 40.02

City of Cape Town CCT01 AA 1.00 12.57 23-Jun-08 23-Jun-23 R186 220 185 0 253 16 6 2.80

CCT02 AA 1.20 11.615 12-Jun-09 12-Jun-24 R186 260 165 0 225 15 3 1.40

CCT03 AA 2.00 11.16 15-Mar-10 15-Mar-25 R186 208 140 0 198 15 19 11.73

City of JHB COJ02 AA+ 1.00 11.90 30-Jun-04 15-Sep-16 R157 164 253 3 251 15 0 0.00

COJ03 AA- 0.70 9.70 26-Apr-05 26-Apr-13 R157 154 135 0 249 8 0 0.00

COJ04 AA- 1.73 9.00 05-Jun-06 05-Jun-18 R203 120 200 -20 205 -10 37 254.31

COJ05 AA- 2.27 12.21 05-Jun-08 05-Jun-23 R208 230 230 0 270 9 6 2.12

COJ06 AA- 0.90 10.815 09-Dec-08 09-Dec-15 R157 265 172 0 188 16 0 0.00

COJ07 AA- 0.85 10.78 23-Mar-11 23-Mar-21 R208 195 190 0 216 9 16 5.16

23


Credit Research

Fixed-rate notes per rating band (continued)


(bps) Liquidity

Issuer Bond

code

Summary

rating

Issue size


Maturity

date

Govi


1-month

change 29-Jul

1-month

change

No of

trades

Nominal

traded (Rm)

AA (continued)

Ekurhuleni Metro EMM01 AA 0.82 10.56 28-Jul-10 28-Jul-20 R208 185 185 0 212 9 2 2.07

EMM02 AA 0.80 10.72 11-Mar-11 11-Mar-21 R208 185 185 0 211 9 16 10.09

Firstrand FRB031 AA- 1.74 9.00 31-Oct-05 15-Sep-14 R157 80 133 0 185 19 38 30.84

FRB051 AA- 2.11 8.50 23-Jun-06 21-Dec-18 R204 95 200 0 210 6 16 2.14

FRBC214 AA- 0.63 12.00 22-Apr-08 21-Dec-18 R204 375 420 -2 437 6 32 172.30

FRX143 AA 0.70 8.50 01-Sep-10 01-Sep-14 R206 135 104 -16 94 -3 20 266.04

FRX153 AA 3.52 8.75 14-Mar-08 14-Mar-15 R157 165 75 -18 110 1 30 50.29

FRX183 AA 0.73 10.50 14-Apr-10 14-Apr-18 R204 165 103 -13 145 -6 0 0.00

FRX243 AA 0.46 10.75 10-Dec-09 10-Dec-24 R186 190 137 -9 190 6 2 0.20

FRX313 AA 0.11 9.50 21-Feb-11 21-Feb-31 R203 180 122 -58 206 -26 0 0.00

FRX453 AA 0.25 8.00 14-Apr-10 14-Apr-45 R214 135 143 0 211 10 0 0.00

MCB MCB1M6 AA- 0.35 10.14 30-Oct-06 30-Oct-11 R155 150 131 0 113 -14 0 0.00

Nam Power NMP20N6 AA- 0.50 9.35 24-Jul-07 24-Jul-20 R207 - 105 0 126 8 0 0.00

Nedbank NBK2A3 AA-/AA+ 3.24 10.55 09-Sep-09 15-Sep-15 R157 200 122 0 144 17 62 424.18

NBK3A3 AA-/AA+ 0.76 11.39 09-Sep-09 09-Sep-19 R207 265 160 0 200 10 14 0.08

NBK6A3 AA-/AA+ 0.48 9.68 19-Apr-10 19-Apr-15 R157 175 126 0 158 18 16 28.80

NBK8A3 AA-/AA+ 0.45 8.39 23-Mar-11 24-Mar-14 R208 128 131 3 140 14 0 0.00

NBK9A3 AA-/AA+ 1.14 9.36 23-Mar-11 23-Mar-16 R157 150 150 0 151 14 33 5.93

Old Mutual OML011 AA 3.00 8.92 27-Oct-05 27-Oct-15 R157 72 130 -1 142 15 53 58.04

Rand Water RW02 AA+ 0.63 13.00 16-Nov-00 31-Jul-12 R155 - 185 0 143 1 0 0.00

RW21 AA+ 0.47 9.97 21-Apr-11 21-Apr-21 R208 - 145 0 0 0 16 1.31

SA Roads NRA014 AA 0.13 11.25 22-Sep-08 30-Apr-14 R157 205 100 0 176 18 0 0.00

NRA018 AA 2.55 12.25 15-Jul-08 30-Nov-18 R204 235 108 -11 152 -5 6 36.40

NRA022 AA 2.70 12.25 15-Jul-08 31-Oct-22 R208 235 110 -1 151 8 80 429.56

NRA028 AA 3.48 12.25 15-Jul-08 30-Nov-28 R186 220 111 -3 190 13 22 476.90

SABSA BEER01 AA-/AA 1.60 9.94 19-Jul-07 19-Jul-12 R155 100 105 0 61 0 9 30.40

Standard Bank SBK51 AA- 2.00 9.50 17-Nov-04 17-Nov-11 R155 95 155 0 138 -12 6 10.10

SBK71 AA- 3.00 9.63 24-May-05 24-May-15 R157 110 147 0 176 19 35 54.72

SBK81 AA- 1.50 8.2 10-Apr-06 10-Apr-13 R201 69 115 0 192 9 18 2.29

SBK91 AA- 1.50 8.40 10-Apr-06 10-Apr-18 R204 88 185 0 206 7 12 229.90

SBK121 AA- 1.60 10.82 24-Nov-09 24-Nov-16 R157 250 165 0 155 12 0 0.00

SBS33 AA 0.75 8.20 25-May-06 25-May-26 R186 80 70 0 109 13 0 0.00

SBS43 AA 0.50 8.60 16-Nov-06 16-Nov-21 R157 57 263 3 176 8 41 422.66

SBS53 AA 1.00 9.06 07-Dec-06 07-Dec-11 R155 75 171 0 150 -11 0 0.00

SBS73 AA 0.08 11.01 26-Mar-08 26-Mar-13 R201 175 150 0 236 9 0 0.00

SBS93 AA 2.75 11.42 07-Jul-09 07-Jul-16 R157 260 120 0 121 13 25 20.50

SBS133 AA 0.70 8.90 22-Sep-10 22-Sep-17 R203 125 125 0 147 7 2 2.00

Transnet TN17 AA- 7.00 9.25 14-Nov-07 14-Nov-17 R203 110 111 0 134 7 47 242.68

TN20 AA- 4.03 10.50 17-Sep-09 17-Sep-20 R208 171 106 0 137 8 59 62.49

TN23 AA- 4.19 10.80 06-Nov-08 06-Nov-23 R186 200 105 -1 159 14 31 93.65

TN25 AA- 2.07 9.50 19-Aug-10 19-Aug-25 R186 123 107 0 151 14 28 23.14

TN27 AA- 7.00 8.90 14-Nov-07 14-Nov-27 R186 95 105 -1 148 13 72 65.12

Umgeni UG21 AA+ 0.60 10.70 02-Mar-10 02-Mar-21 R208 160 150 0 179 9 23 0.00

A

African Bank ABL53 A+ 0.60 9.70 11-Aug-06 11-Aug-11 R155 135 142 0 0 -143 0 0.00

ABL63 A+ 0.45 10.25 18-Jun-07 18-Jun-12 R201 190 151 0 267 -1 4 0.16

ABL73 A+ 0.82 11.85 18-Feb-08 18-Feb-13 R201 305 150 0 238 7 18 0.56

ABL8A3 A+ 0.63 13.00 19-Sep-08 19-Sep-13 R201 375 250 0 319 14 14 4.06

SBS193 AA 1.25 10.18 23-Jun-11 23-Jun-21 R208 170 165 -5 186 4 73 904.40

Toyota TFS06 AA+ 1.00 8.05 20-Mar-07 20-Mar-14 R206 35 120 0 129 11 10 7.47

TFS84 AA+ 0.50 8.70 28-Jul-11 28-Jul-16 R157 130 130 0 0 0 42 1,211.53

24


Credit Research



(bps) Liquidity

Issuer Bond

code

Summary

rating

Issue size


Maturity

date

Govi


1-month

change 29-Jul

1-month

change

No of

trades

Nominal

traded (Rm)

A (continued)

African Bank ABL10A3 A+ 0.50 11.50 15-Mar-10 15-Mar-15 R157 325 240 0 282 19 11 4.81

ABL11A3 A+ 0.53 9.50 29-Sep-10 29-Sep-14 R201 230 220 0 234 21 22 6.14

ABLS2A1 A 0.52 15.50 13-Jul-09 13-Jul-16 R203 625 500 0 579 13 18 4.65

Anglo American

SA Finance AA03 A+/AA- 1.00 9.77 11-May-10 11-May-15 R157 173 140 0 171 19 11 9.34

Barloworld BAW2 A+ 0.75 11.67 02-Oct-08 02-Oct-15 R157 275 180 0 205 17 16 6.07

BAW5 A+ 0.07 8.31 15-Sep-10 15-Sep-13 R206 144 144 0 173 6 0 0.00

BAW7 A+ 0.08 8.73 15-Sep-10 02-Oct-14 R201 173 173 0 186 20 0 0.00

BAW8 A+ 0.09 9.94 15-Sep-10 02-Oct-17 R203 238 205 0 228 8 0 0.00

BAW11 A+ 0.46 9.80 14-Jun-11 01-Oct-18 R204 165 168 21 0 0 17 53.34

Bidvest BID01 A+ 1.50 10.19 06-Aug-07 06-Aug-14 R201 145 150 0 175 21 26 38.79

BID02 A+ 0.10 11.20 14-Jul-09 14-Jul-12 R206 - 140 0 226 -8 3 4.40

Capitec CBL033 A 0.14 12.48 18-May-09 18-May-12 R201 415 140 0 265 -2 0 0.00

CBL063 A 0.14 13.00 02-Nov-09 02-Nov-14 R201 430 260 0 286 22 15 0.12

CBL083 A 0.16 14.10 02-Nov-09 02-Nov-16 R203 500 250 -250 321 -222 4 20.00

CBL11 A 0.80 10.52 06-May-11 06-May-16 R203 231 230 0 285 12 13 0.15

Group Five GFC2 A 0.55 9.20 27-Feb-07 27-Feb-12 R155 134 200 0 166 -10 8 5.72

Imperial Capital IC02 A+ 0.50 9.00 09-May-07 09-May-12 R201 120 125 0 247 -2 35 121.59

Imperial Group IPL4 A 1.50 9.04 29-Mar-07 29-Mar-14 R201 125 155 0 191 19 14 0.19

IPL6 A 1.50 9.78 28-Sep-10 28-Sep-17 R203 210 190 0 213 8 37 12.50

Investec IBL013 A+/AA 0.23 10.04 15-Jun-09 15-Jun-12 R157 166 -55 0 98 -4 0 0.00

IBL073 A+/AA 0.06 8.84 24-Nov-09 24-Nov-11 R157 - 65 0 241 -12 0 0.00

IBL113 A+/AA 0.57 10.35 12-Mar-10 12-Mar-15 R157 210 110 0 150 19 17 6.56

IBL203 A+/AA 0.078 8.75 15-Mar-11 15-Mar-14 R206 149 149 0 159 11 0 0.00

IBL213 A+/AA 0.232 9.51 15-Mar-11 15-Mar-16 R157 160 155 0 157 14 0 0.00

IBL223 A+/AA 0.032 9.99 15-Mar-11 15-Mar-18 R203 145 145 0 166 7 0 0.00

IBL233 A+/AA 0.33 8.46 21-Apr-11 21-Apr-14 R206 - 142 0 0 0 0 0.00

IV011 A/AA- 0.18 16.00 17-Jun-00 31-Mar-12 R155 190 86 0 53 -9 15 10.62

IV031 A/AA- 1.51 16.00 30-Mar-07 31-Mar-12 R155 116 165 0 137 -9 15 65.36

IV041 A/AA- 2.06 10.75 14-Dec-07 31-Mar-13 R201 - 195 0 279 9 2 2.00

IV084 A/AA- 0.20 13.74 30-Apr-08 30-Apr-18 R204 450 450 0 498 9 8 0.52

IV0141 A/AA- 0.13 10.55 22-Jun-10 22-Jun-15 R157 - 258 0 282 19 0 0.00

Liberty LGL11 A+ 2.00 8.93 12-Sep-05 12-Sep-12 R155 120 120 0 67 2 28 381.10

Metropolitan MET011 A 0.50 9.25 15-Dec-06 15-Dec-14 R201 128 115 0 124 21 2 9.00

Momentum MGL011 A 1.00 8.50 25-Apr-06 15-Sep-15 R157 68 157 0 169 16 42 27.95

MTN MTN02 A/AA- 1.30 10.19 13-Jul-06 13-Jul-14 R201 150 120 0 147 0 40 59.64

MTN03 A/AA- 1.25 9.36 13-Jul-10 13-Jul-15 R157 157 134 0 157 18 13 0.00

MTN04 A/AA- 1.25 10.13 13-Jul-10 13-Jul-17 R203 169 151 0 182 8 22 0.00

MTN05 A/AA- 1.50 7.80 28-Oct-10 28-Oct-13 R206 100 94 0 119 7 2 1.00

Nedbank NED61 A+/AA 1.80 9.84 20-Sep-06 20-Sep-13 R201 105 121 0 181 14 6 1.40

NED71 A+/AA 0.65 9.03 08-Feb-07 08-Feb-12 R155 95 100 0 74 -4 8 27.14

NED81 A+/AA 1.70 8.90 08-Feb-07 08-Feb-14 R201 117 100 0 141 17 11 0.10

NED111 A+/AA 1.00 10.54 17-Sep-07 17-Sep-15 R157 185 200 0 220 17 4 0.20

NED12B1 A+/AA 0.12 10.38 14-Dec-07 14-Dec-12 R201 200 190 0 284 6 0 0.00

PSG PSG01 A 0.11 10.79 13-Oct-06 13-Oct-11 R155 205 128 0 112 -18 0 0.00

Sanlam SLI11 A+ 1.16 9.54 15-Aug-06 15-Aug-13 R201 100 75 0 139 13 26 265.95

SLI21 A+ 0.83 9.64 15-Aug-06 15-Aug-16 R157 110 165 0 155 12 15 1.23

Santam SNT011 A+ 1.00 8.25 11-May-07 15-Sep-17 R203 106 190 0 202 7 18 65.00

25


Credit Research



(bps) Liquidity

Issuer Bond

code

Summary

rating

Issue size


Maturity

date

Govi Bench-

mark At issue 29-Jul

1-month

change 29-Jul

1-month

change

No of

trades

Nominal

traded (Rm)

A (continued)

Sappi SMF1 A 1.00 9.34 27-Jun-06 27-Jun-13 R201 105 210 0 277 12 17 1.50

SMF2 A 1.00 10.64 25-Sep-07 14-Oct-11 R155 150 152 0 137 -17 4 0.12

SMF3 A 0.50 12.13 30-Jun-09 30-Jun-12 R206 365 30 -95 119 -105 38 161.79

SSA01 A 0.50 9.63 28-Jun-11 28-Jun-16 R203 150 150 0 200 11 0 0.00

Steinhoff UTR028 A- 1.00 10.49 21-Nov-07 21-Nov-12 R201 215 90 0 188 5 20 38.96

UTR408 A- 0.25 10.16 10-Sep-10 10-Sep-17 R203 239 0 261 8 0 0.00

Telkom TL12 A+ 1.06 12.45 29-Apr-08 29-Apr-12 R155 230 130 0 96 -5 0 0.00

TL15 A+ 1.16 11.90 29-Apr-08 29-Apr-15 R157 250 200 0 240 19 10 0.19

BBB

Eqstra Corp EQS02 BBB+ 0.05 12.92 01-Jul-10 01-Jul-15 R157 486 486 0 512 20 0 0.00

INCA IN04 BBB+ 0.65 8.90 15-Mar-05 15-Mar-15 R157 - 376 0 389 19 0 0.00

IN07 BBB+ 0.35 9.00 16-May-07 16-May-13 R201 145 300 0 368 12 2 6.00

INJ01 BBB+ 0.10 10.96 21-Sep-04 21-Sep-11 R155 220 201 0 188 -18 0 0.00

Omnia Group OMN01 BBB+ 0.41 12.12 28-Nov-08 28-Nov-11 R206 - 145 0 260 -18 0 0.00

Sources: Standard Bank Research; JSE; Bloomberg

26


Credit Research

Floating-rate notes per rating band

Coupon

(spread over Jibar)

Issuer Bond code Summary rating Issue size (Rbn) Issue date Maturity/call date At issue

AAA

DBSA DVF12 AAA 2.21 13-Oct-09 13-Oct-12 110 bps

AA

Absa ABFN053 AA+ 0.526 17-Mar-11 17-Mar-14 103 bps

ABFN063 AA+ 1.35 17-Mar-11 17-Mar-16 125 bps




AB081 AA 0.40 03-May-10 03-May-17 (Call) 210 bps

BMW BMWF02 AA- 0.90 15-Jun-10 15-Jun-12 138 bps

BMWF03 AA- 0.60 15-Jun-10 15-Jun-13 145 bps

FirstRand FRB061 AA- 1.00 05-Nov-07 05-Nov-12 65 bps

FRB071 AA- 0.30 05-Dec-07 06-Dec-12 65 bps

FRB081 AA- 0.10 10-Dec-07 10-Jun-16 70 bps

FRB091 AA- 0.10 10-Dec-07 10-Jun-17 70 bps

FRBC224 AA- 0.44 21-Jun-08 21-Dec-18 (Call) 300 bps

FRJ133 AA 1.604 01-Sep-10 01-Sep-13 125 bps

FRJ143 AA 1.63 20-Jul-09 20-Jul-14 220 bps

FRJ163 AA 1.28 21-Dec-09 21-Jan-16 175 bps

FRJ183 AA 0.117 21-Feb-11 21-Feb-18 149 bps

Land Bank LBK01 AA 1.20 25-Oct-10 25-Oct-13 160 bps

Mercedes-Benz MBF04 AA 0.165 22-Aug-08 22-Aug-11 100 bps

MBF16 AA 0.161 06-Oct-09 06-Oct-11 190 bps

MBF017 AA 1.10 15-Apr-10 15-Apr-12 152 bps

MBF018 AA 0.625 15-Apr-10 15-Apr-13 165 bps

MBF019 AA 0.275 15-Apr-10 15-Apr-14 175 bps

MBF024 AA 1.00 26-May-11 26-May-13 80 bps

MBF025 AA 1.00 26-May-11 26-May-14 98 bps

MBP011 AA 0.426 29-Jan-10 30-Jan-12 180 bps

MBP012 AA 0.17 29-Jan-10 30-Jan-13 190 bps

MBP013 AA 0.15 29-Jan-10 30-Jan-14 200 bps

Nedbank NBK1B3 AA-/AA+ 1.69 09-Sep-09 09-Sep-12 150 bps

NBK2B3 AA-/AA+ 0.25 09-Sep-09 15-Sep-15 220 bps

NBK5B3 AA-/AA+ 1.55 19-Apr-10 19-Apr-13 148 bps



NBK8B3 AA-/AA+ 0.84 23-Mar-11 24-Mar-14 105 bps

NBK9B3 AA-/AA+ 0.68 23-Mar-11 23-Mar-16 125 bps


Standard Bank SBK101 AA- 0.30 19-Nov-08 19-Nov-12 67.5 bps

SBK131 AA- 1.15 24-Nov-09 24-Nov-16 220 bps

SBS143 AA 0.50 07-Feb-11 07-Feb-14 105 bps

SBS153 AA 1.475 26-Apr-11 26-Apr-16 125 bps

SBS183 AA 1.375 23-Jun-11 23-Jun-21 175 bps

Toyota TFS73 AA+ 0.13 07-Feb-11 11-Feb-13 70 bps

TFS77 AA+ 0.20 13-Apr-11 12-Apr-13 75 bps

TFS78 AA+ 0.225 18-Apr-11 18-Apr-13 75 bps

TFS83 AA+ 0.26 28-Jul-11 28-Jul-15 85 bps

A

African Bank ABL8B3 A+ 0.44 19-Sep-08 19-Sep-13 300 bps

ABL93 A+ 0.52 19-Feb-09 19-Feb-12 330 bps

ABL10B3 A+ 0.50 15-Mar-10 15-Mar-15 315 bps

ABL11B3 A+ 0.475 29-Sep-10 29-Sep-14 250 bps

ABL12B3 A+ 1.00 08-Mar-11 08-Mar-15 240 bps

ABLS11 A 0.30 08-Aug-07 08-Oct-12 160 bps

ABLS2B1 A 0.48 13-Jul-09 13-Jul-16 630 bps

ABLS31 A 0.515 31-Mar-11 31-Mar-18 400 bps

Anglo American SA Finance AA02 A+ 0.20 28-Mar-08 28-Mar-16 50 bps

Barloworld BAW3 A+ 0.33 15-Sep-10 02-Oct-17 260 bps

BAW4 A+ 0.23 15-Sep-10 15-Sep-13 170 bps

BAW6 A+ 0.20 15-Sep-10 02-Oct-14 185 bps

27


Credit Research

Floating-rate notes per rating band (continued)

Coupon

(spread over Jibar)

Issuer Bond code Summary rating Issue size (Rbn) Issue date Maturity date At issue

A (continued)

Basil Read (Pty) Ltd BSR04 A- 0.125 20-Dec-10 20-Jun-12 235 bps

Bidvest BID03 A+ 0.25 14-Jul-09 14-Jul-12 290 bps

Capitec CBL043 A 0.185 18-May-09 18-May-12 415 bps

CBL053 A 0.70 02-Nov-09 02-Nov-12 370 bps

CBL093 A 0.15 29-Jan-10 29-Jan-17 510 bps

CBL103 A 0.45 06-May-11 06-May-14 220 bps

Growthpoint Properties Ltd. GRT01 A+ 0.50 08-Dec-10 08-Dec-14 156 bps

GRT02 A+ 0.50 13-May-11 13-May-16 134 bps

Imperial Bank IPB3 A+ 0.30 04-Dec-08 04-Dec-13 (Call) 250 bps

Imperial Group IPL5 A 0.50 28-Sep-10 28-Sep-15 198 bps

Investec IBL033 A+/AA 1.65 15-Jun-09 15-Jun-12 200 bps

IBL053 A+/AA 0.16 12-Aug-09 12-Aug-12 (Call) 215 bps

IBL063 A+/AA 0.12 29-Sep-09 14-Dec-12 170 bps

IBL093 A+/AA 0.611 08-Dec-09 08-Dec-12 150 bps

IBL123 A+/AA 0.17 12-Mar-10 12-Mar-13 155 bps


IBL143 A+/AA 0.95 28-Jun-10 28-Jun-15 175 bps

IBL153 A+/AA 1.17 28-Jun-10 28-Jun-13 146 bps

IBL183 A+/AA 0.783 09-Dec-10 10-Dec-13 105 bps


IBL243 A+/AA 0.12 21-Apr-11 21-Apr-14 110 bps

IV071 A/AA- 0.94 28-Feb-08 31-Mar-13 140 bps

IV094 A/AA- 0.20 30-Apr-08 30-Apr-18 (Call) 375 bps

IV0121 A/AA- 0.25 26-Nov-09 26-Nov-14 325 bps

IV0131 A/AA- 0.05 22-Jun-10 22-Jun-15 (Call) 275 bps

IV0151 A/AA- 1.35 20-Sep-10 20-Sep-17 (Call) 265 bps

Nedbank NED91 A+/AA 2.00 06-July-07 06-July-17 47 bps

NED101 A+/AA 0.50 15-Aug-07 15-Aug-12 45 bps

NED12A1 A+/AA 0.50 14-Dec-07 14-Dec-12 70 bps

Netcare NET31 A 0.25 28-Apr-10 30-Apr-12 195 bps

NTC07 A 0.15 01-Mar-10 01-Mar-12 250 bps

NTC08 A 0.20 13-Jul-10 13-Jul-12 200 bps

NTC09 A 0.195 14-Apr-11 18-Apr-13 134 bps

NTC10 A 0.205 14-Apr-11 18-Apr-14 153 bps

NTC11 A 0.785 14-Apr-11 18-Apr-14 135 bps

Phaello Finance Company PCF03 A- 0.20 20-Jan-10 06-Apr-15 300 bps

Real People Investments RPG0110 A 0.40 24-Feb-11 28-Feb-14 270 bps

Steinhoff UTR041 A- 0.15 19-Apr-11 19-Apr-14 175 bps

UTR042 A- 0.15 19-Apr-11 19-Apr-16 225 bps

UTR043 A- 0.20 19-Apr-11 06-Apr-15 225 bps

BBB

Eqstra Corp EQS04 BBB+ 0.360 22-Sep-10 22-Sep-15 500 bps

INCA INJ02 BBB+ 0.160 30-Apr-10 30-Apr-15 635 bps

Real People Investments RP001 BBB- 0.05 24-Feb-11 28-Feb-13 410 bps

RP002 BBB- 0.13 24-Feb-11 28-Feb-13 475 bps

RCS Investment Holdings RCSB01 BBB+ 0.191 16-Mar-10 16-Mar-14 475 bps

Barloworld BAW9 A+ 0.16 04-Feb-11 04-Feb-14 155 bps

BAW10 A+ 0.614 14-Jun-11 01-Oct-16 155 bps

BSR05 A- 0.15 30-Jun-11 01-Jul-13 197 bps

Resilient Property Income Fund RESB01 A- 0.23 03-Jun-11 03-Jun-14 145 bps

GRT03 A+ 0.50 13-Jul-11 15-Oct-15 145 bps

RCSB03 BBB+ 0.30 12-Jul-11 15-Jul-16 370 bps

RCSB02 BBB+ 0.20 12-Jul-11 15-Jul-13 203 bps

28


Credit Research

Inflation-linked notes per rating band

Yield Coupon

(spread over benchmark) Issuer Bond code Summary rating Issue size (Rbn) Issue date Maturity date Benchmark At issue 29-Jul At issue 29-Jul

AAA

Eskom EL155 AAA 5.00 29-Jun-09 29-Jun-15 3.00 1.80

SA Roads HWAY235 AAA 0.816 08-Mar-10 07-Dec-23 R197 3.62 2.75 34 22

TCTA WS055 AAA 3.53 20-Nov-01 01-Aug-18 R189 5.00 2.10 22

AA

Absa ABCPI11 AA/AA+ 1.08 01-Apr-08 31-Mar-13 R189 6.25 2.01 155 100

ABCPI21 AA/AA+ 3.00 20-Mar-09 20-Sep-14 R189 6.00 2.75 195 175

ABCPI31 AA/AA+ 0.845 10-Dec-09 07-Dec-28 R197 5.50 3.28 155 75

ABSI13 AA+/AAA 1.30 11-Jun-09 11-Jun-14 R189 4.00 2.80 180 180

ABSI23 AA+/AAA 1.00 28-Jan-10 07-Dec-23 R197 5.50 3.53 100 100

ACSA AIRL01 AA- 1.19 30-Apr-08 30-Apr-28 R202 3.64 3.56 110 99

AIRL02 AA- 1.00 18-Feb-09 18-Feb-14 R189 5.50 2.85 200 185

FirstRand FRI153 AA 0.006 14-Mar-08 14-Mar-15 R189 3.00 2.15 101 115

Nedbank NBKI13 AA-/AA+ 1.75 09-Sep-09 31-Mar-13 3.90 3.00

SA Roads NRA013 AA 1.55 15-Jul-08 31-Oct-13 R189 4.25 2.08 210 108

NRA023 AA 0.895 22-Sep-08 31-May-23 R197 5.00 2.98 110 45

Standard Bank SBKI111 AA- 1.80 09-Apr-09 10-Apr-14 R189 5.75 2.25 340 125

SBSI103 AA 3.00 03-Jul-09 03-Jul-13 4.00 3.85

A

African Bank ABLI013 A+ 0.15 24-Apr-08 31-Mar-13 R189 6.25 3.71 270 270

ABLI023 A+ 2.02 08-May-09 08-May-14 R189 8.00 4.10 585 310

ABLI033 A+ 0.75 15-Mar-10 15-Mar-15 R197 5.14 4.38 270 185

BBB

Eqstra Corporation EQS01 BBB+ 0.27 18-Nov-09 18-Nov-14 7.00 7.00

ABSI43 AA+/AAA 0.10 17-Mar-11 31-Jan-22 R212 2.75 3.05 212 50

ABSI33 AA+/AAA 0.23 17-Mar-11 31-Jan-17 R211 2.50 2.53 65 65

SBSI123 AA 1.00 22-Sep-10 31-Jan-17 R211 2.50 2.58 90 70

SBSI113 AA 2.15 03-Mar-10 07-Dec-23 R197 5.50 3.03 100 50

Sources: Standard Bank Research; JSE; Bloomberg

Notes: 1. Subordinated callable Tier 2 Capital 2. Subordinated callable Tier 3 Capital 3. Senior bank debt 4. Upper Tier 2 Perpetual Hybrid 5. Explicit government guarantee

6. Represents a foreign listing on JS 7. Asset swap spreads and interpolated spreads for bonds matur-

ing within six months should be viewed within the context of a money market instrument.

8. UTR02 and UTR40 (privately placed) issued by Steinhoff under Unitrans’s DMTN programme

9. The AB09 is privately placed and has no government bench-mark

10. RPG01 note partially guaranteed by FirstRand Bank Limited

29


Credit Research

Sub investment-grade and unrated issuance — SA corporates

Amount issued (Rbn)

Amount outstanding

(Rbn)

Issuer Issue date Maturity date Call date Type Coupon (%) Spread at issue Rating

Calgro M3 Development (Pty) Ltd 0.005 0.005 16-Feb-11 18-Feb-13 - Floating 12.075 3M Jibar + 650 bps Unrated

Calgro M3 Development (Pty) Ltd 0.02 0.02 22-Jul-11 22-Jul-14 - Floating 13.58 3M Jibar + 800 bps Unrated

Calgro M3 Development (Pty) Ltd 0.02 0.02 22-Jul-11 22-Jul-15 - Floating 15.58 3M Jibar + 1,000 bps Unrated

Brandcorp (Pty) Ltd 0.38 0.38 17-Sep-10 30-Sep-14 - Floating 11.06 3M Jibar + 500 bps Unrated

Brandcorp (Pty) Ltd 0.38 0.38 17-Sep-10 30-Sep-15 - Floating 11.31 3M Jibar + 525 bps Unrated

DRD Gold SA (Pty) Ltd 0.03 0.03 01-Oct-10 01-Oct-12 - Floating 11.03 3M Jibar + 500 bps Unrated

Edcon 1.01 1.01 30-Mar-11 04-Apr-16 Floating 11.83 3M Jibar + 625 bps B



International bonds — SA corporates

Amount

issued (m)

Amount

outstanding

(m)

Issuer Issue date Maturity date Call date Type Coupon Spread at issue Rating

Absa Bank €600 €554 03-Jul-07 16-Jul-12 - Floating Euribor +37.5 bps - A

African Bank $35 $35 25-Oct-10 25-Oct-13 - Floating US Libor + 275 bps - N/A

Anglo American plc €750 €750 22-Sep-09 30-Sep-13 - Fixed 4.25% OBL + 225.4 bps BBB+/Baa1

Anglo American plc €750 €750 24-Nov-09 02-Dec-16 - Fixed 4.375% DBR + 174 bps BBB+/Baa1

Anglo American plc €1,000 €1,000 09-Apr-08 17-Apr-15 - Fixed 5.875% DBR + 211.4 bps BBB+/Baa1

Anglo American plc ¥1,000 ¥1,000 16-Nov-07 04-Dec-12 - Floating JP Libor + 30 bps - BBB+/Baa1

Anglo American plc £400 £400 23-Apr-08 01-May-18 - Fixed 6.875% UKT + 220 bps BBB+/Baa1

Anglo American plc $100 $100 31-Mar-10 10-Apr-12 - Floating US Libor + 92 bps - BBB+/Baa1

Anglo American plc $50 $50 02-Sep-10 10-Sep-12 - Floating US Libor + 100 bps - BBB+/Baa1

Anglo American plc $750 $750 20-Sep-10 27-Sep-13 - Fixed 2.15% UST + 145 bps BBB+/Baa1

Anglo American plc $1,700 $1,700 16-Apr-09 07-May-14 - Fixed 4% - BBB+/Baa1

Anglo American plc $500 $500 20-Sep-10 27-Sep-20 - Fixed 4.45% UST + 175 bps BBB+/Baa1

Anglo American plc $1,250 $1,250 02-Apr-09 08-Apr-14 - Fixed 9.375% UST + 763.2 bps BBB+/Baa1

Anglo American plc $750 $750 02-Apr-09 08-Apr-19 - Fixed 9.375% UST + 661.6 bps BBB+/Baa1

AngloGold Holdings plc $700 $700 21-Apr-10 15-Apr-20 - Fixed 5.375% UST + 165 bps BBB-/Baa3

AngloGold Holdings plc $300 $300 21-Apr-10 15-Apr-40 - Fixed 6.5% UST + 200 bps BBB-/Baa3

Aquarius Platinum $300 $300 24-Nov-09 18-Dec-15 - Fixed 4% - N/A

Cell C € 400 €186.4 29-Jun-05 01-Jul-12 - Fixed 8.625% DBR + 587 bps B

Consol Glass € 420 €372.5 27-Mar-07 15-Apr-14 25-Aug-11 Fixed 7.625% - BB-/B1

Edcon € 630 € 378 08-Jun-07 15-Jun-15 15-Sep-11 Floating Euribor + 550 bps - CCC/Caa1

Edcon €1,180 €1,045 08-Jun-07 15-Jun-14 25-Aug-11 Floating Euribor + 325 bps - B/B2

Edcon €317 €317 22-Feb-11 01-Mar-18 01-Mar-14 Fixed 9.50% DBR + 672 bps B/B2

Edcon $250 $250 22-Feb-11 01-Mar-18 01-Mar-14 Fixed 9.50% UST + 660 bps B/B2(e)

Eskom $1,750 $1,750 19-Jan-11 26-Jan-21 Fixed 5.75% UST + 250 bps BBB+/Baa2

Eskom €500 €500 28-Feb-06 07-Mar-13 - Fixed 4% DBR + 64.9 bps BBB+/Baa2

FirstRand $350 $350 02-Jun-11 09-Jun-16 - Fixed 4.375% UST + 287.1 bps N/A

FirstRand €500 €500 13-Jun-07 20-Jun-12 - Floating Euribor + 45 bps - BBB+/A2

FirstRand £30.5 £30.5 22-Mar-11 29-Mar-21 - Floating GB Libor Flat - N/A

FirstRand $26.2 $26.2 15-Feb-11 28-Feb-18 - Zero coupon - - N/A

Foodcorp €310 €272.9 23-May-07 15-Jun-12 - Fixed 8.875% DBR + 598 bps B-/B2

Gold Fields $1,000 $1,000 07-Oct-10 07-Oct-20 - Fixed 4.875% UST + 245 bps BBB-

Imperial € 300 € 300 07-Apr-06 19-Apr-13 - Fixed 4.75% - Baa3

Investec Bank €1.2 €1.2 01-Dec-10 01-Dec-12 - Floating Euribor + 50 bps - N/A

Investec Bank £200 £200 11-Jun-09 09-Apr-12 - Floating GB Libor + 55 bps - N/A

Investec Bank £0.75 £0.75 01-Dec-10 01-Dec-12 - Floating GB Libor + 50 bps - N/A

Investec Bank £10 £10 11-Mar-11 11-Mar-13 - Floating GB Libor + 75 bps - N/A

Investec Bank £5 £5 23-Sep-10 24-Mar-14 - Floating GB Libor + 50 bps - N/A

Investec Bank £500 £500 11-Feb-11 17-Feb-22 - Fixed 9.625% UKT + 539.3 bps N/A

Investec Bank $2.4 $2.4 01-Dec-10 01-Dec-12 - Floating US Libor +50 bps - N/A

Investec Bank $10 $10 09-Mar-11 11-Mar-13 - Floating US Libor + 75 bps - N/A

Investec Bank $15.2 $15.2 02-Aug-10 01-Aug-13 - Zero coupon - - N/A

30


Credit Research


International bonds — SA corporates (continued)

Amount

issued (m)

Amount

outstanding

(m)

Issuer Issue date Maturity date Call date Type Coupon Spread at issue Rating

Investec Finance £200 £33.8 17-Feb-04 01-Mar-16 - Variable 6.482% UKT + 300 bps Ba1/BBB-

Investec Finance £350 £17.9 16-Jan-07 N/A - Variable 6.25% UKT + 148 bps Ba2/BB+

Mondi Finance €500 €500 26-Mar-10 03-Apr-17 - Fixed 5.75% DBR + 326.6 bps Baa3/BB+

Naspers (Myriad Int Holding BV) $700 $700 22-Jul-10 28-Jul-17 - Fixed 6.375% UST + 400.3 bps Baa3/BBB-

New Reclamation Group €253 €149.5 17-Jan-06 01-Feb-13 07-Sep-11 Fixed 8.125% DBR + 504 bps CCC+/Caa2

Old Mutual plc €750 €750 10-Jan-07 18-Jan-17 18-Jan-12 Fixed 4.5% DBR + 64.6 bps Baa3/BBB-

Old Mutual plc €500 €500 26-Oct-05 N/A 04-Nov-15 Fixed 5% DBR + 174 bps Baa3/BB+

Old Mutual plc £350 £350 15-Mar-05 N/A 24-Mar-20 Fixed 6.376% UKT + 150 bps Baa3/BB+

Old Mutual plc £500 £500 12-Oct-09 19-Oct-16 - Fixed 7.125% UKT + 446.2 bps Baa1/BBB

Old Mutual plc $50 $50 17-Sep-04 20-Sep-11 - Floating US Libor + 50 bps - Baa1/BBB

Old Mutual Capital Funding $750 $750 12-May-03 N/A 22-Sep-11 Fixed 8% - Baa3/BB+

Peermont €520 €416 18-Apr-07 30-Apr-14 30-Apr-12 Fixed 7.75% DBR + 361 bps B/B3

SABMiller €1,000 €1,000 10-Jul-09 20-Jan-15 - Fixed 4.5% DBR + 205.5 bps BBB+/Baa1

SABMiller S150 S150 19-Mar-10 19-Mar-15 - Fixed 6.75% - BBB+/Baa1

SABMiller $550 $550 10-Jul-08 15-Jan-14 - Fixed 5.7% UST + 265 bps BBB+/Baa1

SABMiller $850 $850 27-Jun-06 01-Jul-16 - Fixed 6.5% UST + 133 bps BBB+/Baa1

SABMiller $700 $700 10-Jul-08 15-Jul-18 - Fixed 6.5% UST + 270 bps BBB+/Baa1

SABMiller $300 $300 06-Aug-03 15-Aug-33 - Fixed 6.625% UST + 143 bps BBB+/Baa1

Sappi €250 €250 05-Apr-11 15-Apr-18 15-Apr-15 Fixed 6.625% DBR + 358 bps BBe/(P)Ba2

Sappi $350 $350 05-Apr-11 15-Apr-21 15-Apr-16 Fixed 6.625% UST + 319 bps BBe/(P)Ba2

Sappi €350 €350 24-Jul-09 01-Aug-14 01-Aug-12 Fixed 11.75% - BB/Ba2

Sappi $300 $300 24-Jul-09 01-Aug-14 01-Aug-12 Fixed 12% - BB/Ba2

Sappi $500 $350 05-Jun-02 15-Jun-12 - Fixed 6.75% UST + 175 bps B/B2

Sappi $250 $221 05-Jun-02 15-Jun-32 - Fixed 7.5% UST + 195 bps B/B2

Savcio €125 €70.8 07-Feb-06 15-Feb-13 07-Sep-11 Fixed 8% DBR + 461 bps B+/B2

Standard Bank of SA $500 $423 23-Jul-07 30-Jul-12 - Floating US Libor + 45 bps - BBB+

Steinhoff €467.5 €467.5 10-Mar-11 31-Mar-18 - Convertible 4.5% - N/A

Steinhoff €390 € 390 15-Sep-10 22-May-16 - Convertible 5% - N/A

Transnet $750 $750 03-Feb-11 10-Feb-16 - Fixed 4.5% UST + 245 bps BBB+(e)/A3

Investec Bank $10 $10 12-Oct-10 10-Oct-13 - Zero coupon - - N/A

Investec Tier 1 €200 €200 15-Jun-06 N/A 24-Jun-15 Fixed 7.075% DBR + 388.5 bps N/A

31


Credit Research

Appendix 1: SA corporate credit ratings

Rated South African Entity Moody’s Fitch Other

Republic of South Africa Global FC/LC debt A3 Stable LT FC debt BBB+ Stable FC LT debt BBB+ Stable (S&P) Global ST P-2 ST FC debt F2 FC ST debt A-2 (S&P)

Absa Bank Ltd National Aa1.za/P-1.za Stable National AAA(zaf)/F1+(zaf)

Global LC A1/P-1 Stable / FC A3/P-2 Stable

Stable Global FC A/F1 Stable /

BFSR C– Stable LC A Stable

African Bank Ltd National A1.za/P-1.za Stable LT LC A / ST LC A1 Stable (GCR)

Global Baa2/P-2 Stable

African Development Bank Aaa/P-1 Stable, sub-debt: Aa1 AAA/F1+ Stable Global FC AAA/ A-1+ Stable (S&P)

Airports Company of SA Ltd National LT AA-(zaf)

National ST F1+(zaf) Stable

Anglo American plc Global FC Baa1/P-2 Stable BBB+/F2 Stable Global FC BBB+/ A-2 Stable (S&P)

DMTN: A1.za/ P-1.za National: zaAA/zaA-1 (S&P)

AngloGold Ashanti Ltd Global Baa3 Stable National LT A(zaf) Stable LT FC BBB- / LT LC BBB- Stable (S&P) National ST F1(zaf) National zaA/zaA-1 Stable

Aveng Ltd National LT A(zaf) Stable National ST F1(zaf)

Barloworld Ltd National A+(zaf)/F1(zaf) Stable LT LC A- Stable (GCR) Domestic medium-term note ST LC A1- Stable (GCR)

Programme A+(zaf)

Basil Read LT LC A- RWN (GCR) ST LC A1- (GCR)

BHP Billiton LT FC A1 Stable Global FC A+ Stable / F1 Global FC A+ / A-1 RWN (S&P)

Bidvest National A1.za / P-1.za Stable National LT A+(zaf) Positive LT LC A+ Stable (GCR) National ST F1(zaf) ST LC A1 Stable (GCR)

Bidvest Bank National A3.za / P-2.za Stable

BMW Finance N.V. Global FC (P)A2 / P-1 Stable

Breede Valley Municipality National LT A3.za Stable

Cape Winelands District Municipality National LT A3.za Stable

Capitec Bank Limited National LT A2.za/P-1.za Positive LT LC BBB+ / ST LC A2 Positive (GCR)

Cell C (Pty) Ltd Global FC Caa2 Global LT B- Positive (S&P)

City of Cape Town National Aa2.za / P-1.za Stable

City of JHB National LT Aa3.za Stable National AA-(zaf)/F1+(zaf) Stable

Global LC LT BBB+ Stable

City of Tshwane Aa3.za / P-1.za Stable

Colgate-Palmolive (Pty) Ltd Global Aa3/P-1 Stable Global AA-/F1+ Stable Global AA-/A-1+ Stable (S&P)

Consol Glass (Pty) Ltd Global B1 Stable Global LT B+ Stable (S&P)

Daimler (Mercedes-Benz SA) Global A3/P-2 Negative Global LT A-/F2 Stable LT issuer BBB+ Positive (S&P) (Global ratings for DaimlerAG) National Aa2.za /P-1.za Negative National AA(zaf) ST issuer A-2 Positive (S&P) National ST F1+ (zaf)

LC A / A-1 Stable (S&P)

Sources: Standard Bank Research; Respective credit rating agencies

32


Credit Research

Appendix 1 (continued): SA corporate credit ratings


Denel (Pty) Ltd National LT AA(zaf) Negative National ST F1+(zaf)

Development Bank of SA Global A3 Stable National LT AAA(zaf) Stable Global FC BBB+/A-2 Stable (S&P) National ST F1+ (zaf) Global LC A/A-1 Stable (S&P)

Drakenstein, Municipality of National LT A3.za Stable

Eagle Bonds One Prop. Ltd Global LT Aaa National LT Aaa.za

East Rand Water Care Company National A1.za Stable

Edcon Holdings (Pty) Ltd Global FC LT Caa1 Negative Global LT B- Stable (S&P)

Ekurhuleni National LT Aa2.za/P-1.za

Eqstra Corporation Ltd zaBBB+/zaA-2 (S&P)

Eskom Holdings Ltd Global FC Baa2 Stable National LT AAA(zaf) Stable National zaAA/zaA-1 (S&P)

Global LC Baa2 Stable National ST F1+(zaf) Global LC LT BBB+ Stable (S&P)

Global LC A Stable Global FC LT BBB+ Stable (S&P)

Fedhealth – domestic currency claims paying ability AA- (GCR)

Finbond Group Ltd National Ba3.za/NP.za Stable

FirstRand Bank Ltd National LT Aa2.za Stable National LT AA(zaf) Stable Global FC BBB+/A-2 Stable (S&P) National ST P-1.za National ST F1+(zaf) Global LC BBB+/A-2 Stable (S&P)

Global (FC) A3/P-2, Global (LC) A2 Stable, C– Stable

Global BBB+/F2 Stable National zaAA/zaA-1 Stable (S&P)

Foodcorp (Pty) Ltd Global FC LT B2 Stable Global LT B- Stable (S&P)

Genbel Securities Ltd National A+(zaf)/F1(zaf) Stable

General Reinsurance Africa Ltd FSR AA+ Stable (S&P)

George Municipality National LT A2.za

Gold Fields Ltd Global Baa3 (LC) Stable Global BBB-/A-3 Stable (S&P) National zaA/zaA-1 Stable (S&P)

Greater Tzaneen Municipality National LT Baa2.za Stable

Grindrod Bank Ltd National Baa3.za/P-3.za Stable

Group Five Construction Ltd LT LC A Developing (GCR) ST LC A1 Developing (GCR)

Growthpoint Properties Ltd Global LC Baa3/P-3 Stable

National A2.za/P-2.za Stable

Hannover Reinsurance Africa Ltd FSR A Stable (S&P) Global LC LT A Stable (S&P)

Harmony Gold Mining Limited LT LC BBB Stable (GCR)

ST LC A2 Stable (GCR)

Home Finance Guarantors (Insurance) Ltd FSR BBB+


33


Credit Research




Home Loan Guarantee Company National FSR AA+(zaf) Stable

Imperial Bank Ltd National LT AA-(zaf) RWP

National ST F1+(zaf)

Imperial Capital Limited National A1.za/P-1.za Stable

Imperial Group Ltd National A2.za/P-1.za

Global Baa3 Stable

Imperial Mobility Finance BV Global FC LT Baa3 Stable

Industrial Development Corp Global A3 National AA(zaf) / F1+(zaf) Stable

Infrastructure Finance Corporation Ltd (INCA) National LT Baa2.za Negative National ST P-2.za

Investec Bank Ltd National Aa2.za/P-1.za Stable National A+(zaf)/F1(zaf) Stable Global (LC)A2 Stable, (FC) A3/ P-2 Global FC BBB/F3 Stable BFSR C- Stable

Kagiso Trust Investments National LT Baa2.za Stable

Knysna Municipality National LT Baa2.za Stable

Land and Agricultural Development Bank National LT AA(zaf) Stable


Liberty Group Ltd FSR AA(zaf) Stable

National LT AA-(zaf) Stable; sub-debt A+(zaf)

Macquarie Securities South Africa (Pty) Ltd National zaAA+/zaA-1 (S&P)

Global LC A-/A-2 (S&P)

Massmart Holdings Ltd A+/A1 Stable (GCR)

Mauritius Commercial Bank National Aa3.za

Global Baa2/P-2 Stable

Mercantile Bank Ltd National A3.za/P-2.za Review for possible downgrade

Metropolitan Holdings Ltd National LT A+(zaf) Stable

Metropolitan Life Ltd FSR AA(zaf) Stable

National LT AA-(zaf) / sub-debt A(zaf)

Momentum Group Ltd FSR AA(zaf) Stable

National AA-(zaf) / sub-debt A(zaf)

Momentum Health – domestic currency claims paying ability

A+ (GCR)

Mondi Global Baa3/P-3 Positive Global LT BB+ Positive (S&P)

MTN Group Ltd National LT A2.za Positive National LT AA-(zaf) Stable LT LC AA- Stable (GCR)

Global LT Baa3 Positive National ST F1+(zaf) ST LC A1+ Stable (GCR)

34


Credit Research




Munich Mauritius Reinsurance Ltd Global LC LT A Stable (S&P)

Munich Reinsurance Co. of Africa Ltd Global LC LT A Stable (S&P)

Mutual & Federal Insurance Co Ltd – domestic currency claims paying ability AA+ Stable (GCR)

Namibia Ports Authority (Pty) Ltd National A-(zaf)/F2(zaf) Positive

Namibia Power Corporation National AA-(zaf)/F1+(zaf) Positive

Global BBB-/F3 Positive

Naspers Ltd Global FC BBB-/F3 (Stable)

National LT A(zaf) Stable

National ST F1(zaf)

Nedbank Ltd National Aa2.za Stable National LT AA-(zaf) Stable

National ST P-1.za National ST F1+(zaf)

Global FC A3/P-2 / LC A2/P-1 Stable C– Stable

Global FC BBB/F2 Stable / LC BBB Stable

Nelson Mandela, Metropolitan Municipality National LT Aa3.za Stable

Network Healthcare Holdings Ltd “Netcare” A/A1 (GCR) (National scale)

New Reclamation Group (Pty) Ltd Global FC LT Caa2 Negative Global LT CCC+ Negative (S&P)

Old Mutual Life Assurance SA IFSR A1 Stable FSR AAA(zaf) Stable

Nat LT AAA(zaf) Stable / sub-debt AA(zaf)

Old Mutual plc Global FC LT Baa1 Stable IDR A-/F2 Stable

Global LC Baa1 / P-2 Stable

Peermont Global (Pty) Ltd Global FC LT B3 Stable Global LT B- Stable (S&P)

Phaello Finance Company (Pty) Ltd National A-(zaf)/F2(zaf) Stable

Pick n Pay Stores Ltd National A+(zaf)/F1(zaf) Negative

PSG Financial Services National scale: A/A1- Stable (GCR)

Rand Water AA+(zaf)/F1+(zaf) Stable zaAAA (S&P)

Global FC BBB+ Stable (S&P)

Global LC A Stable (S&P)

RCS Investment Holdings (Pty) Ltd National Baa1.za/P-2.za Stable

Real People Investment Holdings (Pty) Ltd National Baa3.za/P-3.za Negative

Redefine Properties Ltd Global Baa3/P-3 Stable

National A3.za/P-2.za Stable

Renaissance Merchant Bank Ltd Global LC LT BB+ Stable (GCR)

Resilient Property Income Fund – R500m DMTN

programme

A-/A1- (GCR)

RMB Financial Services Ltd FSR BBB IFS BBB Stable

35


Credit Research



RMB Structured Insurance Ltd FSR BBB IFS BBB Stable

National FSR A+(zaf) Stable National IFS A+(zaf)

Royal Bank of Scotland NV – SA Branch National Aa2.za / P-1.za Stable

SABMiller plc (national ratings for SABSA) National Aa3.za/P-1.za Stable BBB+/ F2 Stable National zaAA/zaA-1 (S&P)

Global Baa1/P-2 Stable International BBB+/A-2 Stable (S&P)

Sanlam Life Insurance Ltd FSR AA+(zaf) Stable

National AA(zaf)/F1+(zaf) / sub-debt A+(zaf) Stable

Sanlam Ltd National LT AA-(zaf) Stable

Sanlam Capital Markets Ltd National A+(zaf) / F1(zaf) Stable

Sanlam Developing Markets National LT AA(zaf) Stable

National IFS AA+(zaf) Stable

Santam Ltd FSR AA+(zaf) Stable AA- (sub-debt) (GCR)

National AA(zaf) Stable / sub-debt A+(zaf)

AAA (domestic currency claims paying ability) (GCR)

Sappi Limited Ba3 Positive Global FC BB-/ B Stable (S&P)

Global LC BB-/ B Stable (S&P)

Senior unsecured debt B

Sappi Southern Africa National A(zaf)/F1(zaf) Stable Senior unsecured issue A(zaf)

Sasol National Aa3.za/P-1.za Stable LT foreign issuer BBB+/A-2 Stable

Global Baa1/P-2 Stable (S&P)

Savcio Holdings (Pty) Ltd Global FC LT B2 Stable Global LT B+ Credit Watch with developing implications (S&P)

Scor Africa Ltd FSR A Positive (S&P)

South African Roads Agency National Aa2.za/ P-1.za Stable

Global A3 / P-2

Standard Bank of SA Ltd BFSR: C Stable National LT AA(zaf) Stable BBB/A-2 Positive (unsolicited)

Global FC A3 / P-2 Stable National ST F1+(zaf) (S&P)

Global LC A1 / P-1 Global FC BBB+ Stable /

LC BBB+/F2 Stable

Steinhoff International Holdings Ltd Ba1 Stable National LT A-(zaf) Stable LT LC A- Stable (GCR)

National ST F2(zaf) ST LC A2 Stable (GCR)

Super Group Ltd National LT BB+(zaf) Stable

National ST B(zaf)

Swartland Municipality A3.za Stable

TCTA RSA guarantee existing bonds

TCTA – Berg Water Project AA+(zaf)/F1+(zaf) Stable

TCTA – Vaal Rover Eastern Sub-System Augmenta-tion Project

AA+(zaf)/F1+(zaf) Stable

TCTA – Komati Water Scheme Augmentation Project AA+(zaf)/F1+(zaf) Stable

TCTA – Mooi-Mgeni Transfer Scheme Phase 2 Pro-

ject AA+(zaf)/F1+(zaf) Stable


36


Credit Research



Telkom SA Ltd Global Baa1 Review for possible Global FC BBB Stable (S&P)

downgrade Global LC BBB Stable (S&P)

National A1.za Review for possible downgrade

Toyota Financial Services SA (Pty) Ltd Aa3 (Global) Review for possible downgrade – R3bn DMTN

Global LC AA-/A-1+ Negative (S&P)

Transnet Ltd Global FC A3/P-2 Stable RSA guarantee existing bonds AAA(zaf) Stable LT FC BBB+ Stable (S&P)

Global LC A3/P-2 Stable Global FC BBB-/F3 Stable LT LC A- Stable (S&P)

Aa3.za/P-1.za (Unsecured DMTN) Global LC BBB+/F2 Stable National zaAA+/ zaA-1 (S&P)

National LT AA-(zaf)/F1+(zaf) Stable

Unilever NV Global A1/P-1 Stable Global senior unsecured A+ Stable

Int’l LT foreign and local A+ / ST foreign and local A-1 Stable (S&P)

Global ST F1

Unitrans National LT A-(zaf) Stable

National ST F1(zaf)

United Towers (Pty) Ltd National Aa3.za / P-1.za Stable

Umgeni Water National LT AA+(zaf) Stable


Vodacom Group Ltd A+ /A1 (GCR)

National LT A(zaf) Positive

Telecom Namibia Global LC LT BBB- Stable

zaAA-/zaA-1 (S&P)


37


Credit Research

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The analyst(s) who prepared this research report (denoted by an asterisk*) hereby certifies(y) that: (i) all of the views and

opinions expressed in this research report accurately reflect the research analyst's(s') personal views about the subject

investment(s) and issuer(s) and (ii) no part of the analyst’s(s’) compensation was, is or will be directly or indirectly related

to the specific recommendations or views expressed by the analyst(s) in this research report.

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This is a monthly report. We plan to update the individual companies we cover when there is next substantial financial

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Bank Group”) that research analysts may not be involved in activities in a way that suggests that he or she is represent-

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proprietary interests of those sales and trading departments may conflict with your interests.

Disclosures*

A. The analyst is an officer, board member, or director of the Company

B. The company beneficially owns 5% or more of the equity shares of Standard Bank Group as at Dec 2010

C. Standard CIB beneficially owns 1% or more of the equity shares of the company

D. Standard CIB may beneficially hold a significant financial interest of the debt of this company where the aggregate of

this debt is more than US$ 15 million

E. The Company is a client of Standard CIB

F. Standard CIB has lead managed or co-lead managed a public offering of the securities of the company in the last 12

months

Company Disclosure

City of Johannesburg (COJ) E, F, G, H

Impala Platinum Ltd D, E, G, H, K

Vodacom Group Ltd D, E, G, H

Steinhoff International Holdings Ltd D, E, F, G, H

ABSA Group Ltd D, E, G, H, K

Transnet D, E, G, H

Blue Granite Investments No. 2 (Pty) Ltd E, G, H

Eskom D, E, G, H

Basil Read Holdings Ltd E, H

African Export-Import Bank D, E, G, H

Thekwini Fund 9 (Pty) Ltd None

Liberty Group Limited E, G, H

Standard Bank of South Africa Ltd (Standard Bank Group Ltd)

D, E, F, G, H, K

Prime Realty Obligors E

Nitro Securitisation 4 Issuer Trust E

Mondi plc D, E, H

Savcio Holdings E

38


Credit Research

G. Standard CIB has received compensation for investment banking services from the company within the last 12

months

H. Standard CIB expects to receive, or intends to seek, compensation for investment banking services from the com-

pany during the next 3 months

I. This research report has been communicated to the Company and following this communication, its conclusion(s)

has been amended before its dissemination

J. Analyst holds long or short personal positions in a class of common equity securities of this company

K. Standard CIB is a market maker or liquidity provider in the financial instruments of the relevant issuer

* Disclosures are correct as of 2 August 2011

Legal Entities

To U. S. Residents

Standard New York Securities, Inc. is registered with the Securities and Exchange Commission as a broker-dealer and is

also a member of the FINRA and SIPC. Standard Americas, Inc is registered as a commodity trading advisor and a com-

modity pool operator with the CFTC and is also a member of the NFA. Both are affiliates of Standard Bank Plc and Stan-

dard Bank of South Africa. Standard New York Securities, Inc is responsible for the dissemination of this research report

in the United States. Any recipient of this research in the United States wishing to effect a transaction in any security

mentioned herein should do so by contacting Standard New York Securities, Inc.

To South African Residents

The Standard Bank of South Africa Limited (Reg.No.1962/000738/06) is regulated by the South African Reserve Bank

and is an Authorised Financial Services Provider.

To U.K. Residents

Standard Bank Plc is authorised and regulated by the Financial Services Authority (register number 124823) and is an

affiliate of Standard Bank of South Africa. The information contained herein does not apply to, and should not be relied

upon by, retail customers.

To Turkey Residents

Standard Unlu Menkul Degerler A.S. and Standard Unlu Portfoy Yonetimi A.S. are regulated by the Turkish Capital Markets

Board (“CMB”). Under the CMB’s legislation, the information, comments and recommendations contained in this report fall

outside of the definition of investment advisory services. Investment advisory services are provided under an investment advi-

sory agreement between a client and a brokerage house, a portfolio management company, a bank that does not accept de-

posits or other capital markets professionals. The comments and recommendations contained in this report are based on the

personal opinions of the authors. These opinions might not be appropriate for your financial situation and risk and return prefer-

ences. For that reason, investment decisions that rely solely on the information contained in this presentation might not meet

your expectations. You should pay necessary discernment, attention and care in order not to experience losses.

Important Regional Disclosures

To the extent this is a report authored in whole or in part by a non-U.S. analyst and is made available in the U.S., the following

are important disclosures regarding any non-U.S. analyst contributors:

The non-U.S. research analysts (denoted by an asterisk*) are not registered/qualified as research analysts with FINRA. The

non-U.S. research analysts (denoted by an asterisk*) may not be associated persons of Standard New York Securities Inc and

therefore may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications with a subject com-

pany, public appearances and trading securities held by a research analyst account. Each analyst (denoted by an asterisk*) is

a Non-U.S. Analyst. The analyst is a research analyst employed by The Standard Bank Group Limited.

General

For the purposes of this report Standard CIB refers to those divisions of Standard Bank Group Limited who are mainly

involved in corporate and investment banking business and does not refer exclusively to any particular entities within

Standard Bank Group. This research report is based on information from sources that Standard CIB believes to be reli-

able. Whilst every care has been taken in preparing this document, no research analyst or member of Standard CIB

gives any representation, warranty or undertaking and accepts no responsibility or liability as to the accuracy or com-

pleteness of the information set out in this document (except with respect to any disclosures relative to members of Stan-

dard CIB and the research analyst’s involvement with any issuer referred to above). All views, opinions and estimates

contained in this document may be changed after publication at any time without notice. Past performance is not indica-

tive of future results. The investments and strategies discussed here may not be suitable for all investors or any particu-

lar class of investors; if you have any doubts you should consult your investment advisor. The investments discussed

39


Credit Research

may fluctuate in price or value. Changes in rates of exchange may have an adverse effect on the value of invest-

ments. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Mem-

bers of Standard CIB may act as placement agent, advisor or lender, make a market in, or may have been a manager or

a co-manager of, the most recent public offering in respect of any investments or issuers referenced in this report. Mem-

bers of Standard CIB and/or their respective directors and employees may own the investments of any of the issuers

discussed herein and may sell them to or buy them from customers on a principal basis. This report is intended solely for

clients and prospective clients of members of Standard CIB and is not intended for, and may not be relied on by, retail

customers or persons to whom this report may not be provided by law. This report is for information purposes only and

may not be reproduced or distributed to any other person without the prior consent of a member of Standard CIB. Unau-

thorised use or disclosure of this document is strictly prohibited. By accepting this document, you agree to be bound by

the foregoing limitations. Copyright 2011 Standard Bank Group Limited. All rights reserved. AG/SACR/03411

standard bank monthly market barometer - july 2011

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