Financing Of Municipal Infrastructure Head of Public Sector: Stephen Seaka - 23 August 2013 - Municipal Institute of Learning
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Financing Of Municipal Infrastructure Head of Public Sector: Stephen Seaka 23 August 2013
1. Absa Bank Overview 2. Absa Public Sector 3. Infrastructure Funding Alternatives 4. Bus Rapid Transit 5. Conclusion 6. Questions
Absa Bank Overview
3
Realising the “Go-To-Bank-in-Africa” Strategy
Absa and Barclays recently stepped up the One Africa strategy with the acquisition by Absa
of Barclays’ Africa operating in 14 countries in Africa
Barclays has a strong heritage in Africa having operated in over 14 countries in this Barclays Africa Coverage
region for over 100 years. Absa is a leading bank with considerable scale in South
Africa
Barclays Africa
■ In December 2012, It was announced that Absa acquired Barclays Africa’s
businesses in Botswana, Ghana, Kenya, Mauritius, Seychelles, Tanzania, Uganda
Egypt
and Zambia
■ In-country presence through dominant Barclays commercial banking operations
■ Barclays Africa serves its 2.8m customers through a network of 573 branches and
service centres
Uganda
■ Barclays Africa has a strong and distinct Africa focus with a dedicated Africa Ghana
coverage team Kenya
■ Absa Corporate & Investment Banking provides a full suite of investment banking Nigeria Tanzania
products across the continent
■ Absa Bank became a subsidiary of Barclays Bank Plc in 2005, when Barclays Seychelles
acquired a 56.5% controlling stake in the Absa Group. The acquisition of Barclays’ Zambia
Africa businesses increased the stake to 62.3% Mozambique
■ Absa / Barclays Africa has extensive product capabilities, split between Retail and Namibia
Business Banking, Insurance, and Corporate and Investment Banking
■
Zimbabwe Mauritius
Absa has the largest capital reserves and single lending capacity in South Africa Botswana
South Africa
■ With 950 branches and 9800 ATMs, Absa has the largest retail branch network in
South Africa
Number of branches in Africa (2011)
1,400
Key Highlights 1,200
1,000
Accelerates the One Bank in Africa 800
Covers 14 Africa countries 600
strategy
400
A leading franchise – top 4 by
revenue in 7 countries Most number of branches of any
bank in Africa
200
0
Absa/ Barclays Standard Standard
NumberFirstRand
Ecobank of BranchesUBA Nedbank
Africa Bank Chartered
Leading M&A Advisor in SSA Leading Investment Bank in SSA
bonds
“Post successful conclusion of a transaction, investors will have a liquid entry point
+15 million >1,500 .+10,000 >50,000 for Sub-Sahara banking/financial services.”
Clients Branches ATMs Employees Credit Suisse, 6 December 2012
2
5
6
7
We have the most extensive local distribution network in South Africa serving over 10.9 million clients through 1174 outlets.
We have in excess of 950 branches, 22 cash centres, and over 9,822 ATMs nationwide. We also have more than 42,000 Point
of Sale devices in South Africa
8Absa Bank Public Sector
9Overview of Market Share
1. Municipal Transactional Banking National Market 2. Municipal Transactional banking Provincial Market
Share 2012 Share 2012
ABSA leads sector in transactional bankingOur Service Offering
Transactional banking
Provision of financing
Arranging and raising of funding
Advisory for optimal funding structures
Value added services:
Enterprise Development
Workplace banking
CSI
Affordable housing
11Our Relationship Approach to Local Government
Merchant
Services Cash
Devices
Kiosks
SWIFT
Cash
Accepting
ATM’s
Client Centric Cell
Relationship Model Phone
Banking
Holistic Solution
3 points of contact
Local 1 Relationship
Cash
Send
Government Executive
2
Relationship
3 Service Manager Business
Integrator
Client Support Centre
Pre-Paid
Reporting CardsInfrastructure Funding Alternatives
13Local Government Service Delivery Mandate
Municipalities have a significant service delivery and economic development responsibility
Metro budgets are already consuming close to 60% of the total local government spending and
based on the MTREF growing to 64%
Despite the Metro’s significant infrastructure spending over the last few years, the infrastructure
backlog and the requirements for new infrastructure is increasing
Metro’s are required to cater for an ever increasing emigration from citizens to the metropolis
and it is imperative to strengthen long term strategic and capital planning abilities to provide for
the structural changes taking place
The Metro’s cannot solely rely on their balance sheet capacity to raise capital & similar to their
international counterparts, need to consider making use of alternative service delivery
procurement options
The regulatory environment in South Africa, dealing with ASD options is well developed and
although cumbersome for the institutions provides great comfort to potential private sector
partners
ASD options include management contracts, long term lease arrangements, concessions
14Infrastructure Funding Options
Long term loans
Municipal bonds/Debt capital markets
Project finance (ring-fenced)
Export credit agency (ECA) backed
15Borrowing Profile
Debt Profile ABSA Appetite
Local Government debt approximately R46bn R120bn mandate & scale set aside by ABSA to
fund public sector
ABSA holds approximately R5bn of Local Govt
book Current utilisation at approx R80bn
R20bn required over the MTREF R40bn available to fund public sector
16Long Term Loans
Tenor requirements (liquidity constraints)
Amortising versus bullet profiles
Balance sheet capacity
Economic assets
Credit appetite from commercial banks and DFIs
17Loans Credentials
City of Johannesburg Development Bank of Transnet Development Bank of
Southern Africa Limited Southern Africa Limited
ZAR 1,311,000,000
Senior Secured Facility USD 100,000,000 ZAR 2,000,000,000 USD 100,000,000
Term loan Term Loan Term loan
Sole Lead Arranger Mandated Lead Arranger Joint Mandated Sole Arranger
Lead Arranger
June 2013 December 2012 March 2012 June 2012
Theewaterskloof Greater Tubatse Overstrand
Gauteng Provincial Local Municipality Local Municipality Local Municipality
Government
ZAR 11,300,000 ZAR 9,500,000 ZAR 120, 000,000
ZAR 978,000,000 Term Loan Term Loan Senior Facility
Term loan
Sole Lead Arranger Sole Provider Sole Provider Sole Provider
August 2011 2013 2013 2013
Hessequa Drakenstein
Local Municipality Local Municipality
KwaDukuza
ZAR 120, 000,000 ZAR 120, 000,000 Local Municipality
Senior Facility Senior Facility
ZAR 21,000,000
Term Loan
Sole Provider Sole Provider Sole Provider
2013 2013 2012Municipal Bonds – Debt Capital Markets
Wide range of investors:
■ Insurance companies
■ Asset Managers
Market Capacity
Domestic medium term note programme; single document under which all bond issues can
be executed
Limited covenants and normally unsecured
Bullet repayment profiles with no prepayment options
Mandatory credit rating
19Bonds-DCM Credentials
City of Johannesburg City of Johannesburg City of Johannesburg
bond issue – COJ01 partially guaranteed bond bond issue – COJ03
issue – COJ02
R1 billion R1 billion R700 million
Joint-Lead Arranger Joint-Lead Arranger Dealer
2004 2004 2005
Ekurhuleni Metropolitan Ekurhuleni Metropolitan Ekurhuleni Metropolitan
Municipality Municipality Municipality
R4bn DMTN Programme EMM01- ZAR800 mn EMM02- ZAR800 mn
Sole Lead Arranger Sole Lead Arranger Sole Lead Arranger
July 2010 July 2010 March 2011
City of Cape Town City of Cape Town – CCT01
ZAR7bn DMTN Programme ZAR1.0 bn
Joint Lead Arranger Joint Lead Arranger
June 2008 June 2008
20Bonds-DCM Credentials
National Research
Rand Water Foundation City of Johannesburg National Treasury of the Development Bank of
Republic of South Africa Southern Africa
Due Diligence & Business R2.5 billion
R633 million Plan Enhancement of an USD2 billion R500 million
NRF PPP Project Commercial Paper Issue Notes Issue Bond Tap
Co-Lead Manager Advisor Co Advisor Co Advisor Co Lead Manager
2011 2010 2010 2010 2010
Public Investment National Empowerment
City of Johannesburg Corporation National Housing Finance Fund KZN Growth Fund
Corporation Limited
R25 billion R950 million R1.5 billion
R1 billion R1.5 billion
Unwind of MTN BEE Asonge Public Offer Fund establishment and
Commercial Paper Issue transaction Funding Strategy and Plan Structuring implementation
Co Advisor Lead Advisor Lead Advisor Lead Advisor Lead Advisor
2011 2008 2008 2007 2007
Gauteng Enterprise City of Johannesburg
Eskom ECA City of Johannesburg Propeller Republic Of South Africa Department of Public
R300 million Issuance of a Government Enterprise
USD200 million R17 billion R300 million Establishment of an SME Bond
Fund ……. R 6 billion SAA Hedge book
Export Credit Agency & Infrastructure €750 million
Capital Raising Procurement Initiative Business Plan Consulting
Co Advisor Co Advisor Lead Advisor Lead Advisor Advisor Advisor
2007 2007 2007 2006 2006 2005
21Project Finance
Ring-fenced solution that leads to private sector party arranging finance based on project’s
viability
Focus on life cycle costing to compliment proper asset management strategy
Risk sharing model
Well regulated model & value for money test
22Typical Project Finance Funding
Typical Characteristics Project Finance Based Funding
Project Finance dates back to the 1930’s
Originally in oil/gas and later in infrastructure Financial Shareholder Project Technical
Share risks, no parent risk, off-balance sheet & “equity efficient” Legal Advisors Shareholders Contractors
Limited recourse to the project sponsors until project completion
Debt repayment relies principally on the project’s future cash flows
The project is “ring-fenced”, utilizing a special purpose vehicle (SPV)
Suppliers Project
Offtakers
Long-term, although lower than the length of offtake Company
Highly structured
Security over assets rights and rights of the project company
Financial Project
Legal Company Banks
Risk Analysis Insurance Advisors
Project Level Risks
Technical
Banks
Institutional Risk Legal
Advisors
Force Majeure Insurance
Credit Enhancements
Sovereign Risk
- Timing - Technology Risk - Force Majeure
Risk - Key agreements
- Project Performance
- Market Risk
- Project operations - Completion Risk
- Environmental
factors - Lending Controls - Foreign Exchange Risk
- Syndication Risk - Legal Risk
- Interest Rate Risk
8Project Finance Credentials
Trans Caledon Trans Caledon Gauteng Provincial 250MW Hydropower Project
Tunnel Authority Tunnel Authority Government 1,000MW Peaking Power Project Finance ATC South Africa
Lesotho Highlands Berg River Water Project Rail PPP Project Finance
Water Project USD 870m ZAR 1,2bn
ZAR 20.5bn ZAR 7bn
ZAR 1.3bn ZAR 1bn Joint-MLA, Hedging Bank MLA, Sole Underwriter
Arranger, Underwriter, Coordinating MLA IDA Facility Agent Facility Agent
Financier Financier Investor South Africa Uganda South Africa
South Africa South Africa South Africa Ongoing 2012 2011
Roodeplaat
Temba Water Services Rustenberg Water Services Tharisa Minerals (Pty) Ltd Trans Caledon Gauteng Provincial
ZAR 1bn Tunnel Authority Government
ZAR 530 mn ZAR 300 mn Komati Water Scheme
Joint MLA Project Rail PPP
Advisor, Co-Sponsor, Advisor, Co-Sponsor, ZAR 2.2bn ZAR 3.4bn
Arranger, Underwriter Arranger, Underwriter Hedging Provider Financier Arranger, Underwriter,
South Africa South Africa Investor
September 2003 December 2004 2012 2012 South Africa
Selected Deal Awards
ZAR 260m
Project Finance Facility
USD 2,000,000,000 2,400MW Coal-fired Sole Arranger,
African Oil and Gas Deal of African Wind Deal of the Year Mandated Lead Arranger Power Project Captive Coal-fired Power
the Year Account Bank,
Project Finance Plant
Sumitomo Corp; Eskom; IDC; USD 8bn Hedging Provider Undisclosed
Nigerian National Petroleum Rainmaker Energy Financial Advisor Transaction Advisor
Corporation; Exxon Mobil Droper Wind Botswana December 2011 Ongoing
RDP Funding
2012 Deal of The Year
2012
6What are ECAs?
Export Credit Agencies (ECAs) are government ECA Loan Agreement
institutions in major exporting countries that provide (between Lender and Borrower)
support to facilitate international trade and export
transactions by providing: ECA Loan 85% of export content
Value Up to 30% cover for local costs
■ Bank guarantees to lenders
Drawdown Mirrors contract payments
■ Insurance for lenders and suppliers
■ Direct lending to buyers Grace period - repayment starts when
goods are delivered
ECA guarantees cover both political and commercial risk, Repayment Repayment horizon (depending on project
and do not cannibalise market capacity for other funding can achieve over 10 years)
products
Instalments are equal semi-annuals
ECAs provide competitive terms and conditions to
support their local exporters Dependent on credit and tenor, but subject
to country minima
■ Longer tenors than available in the commercial Premium
Payable to ECA as a condition precedent
market to drawdown
■ Additional liquidity
Interest Floating or Fixed
■ Low margins
ECA Support Agreement
■ Deeper risk appetite (between ECA and Lender)
ECA financing can be executed on a corporate basis, Security
First demand guarantee or insurance
project finance basis or hybrid basis policy (depending on ECA)
In the current market, ECA represents the Up to 100% of the ECA loan value for both
Guarantees
3rd pillar of liquidity political and commercial risks
4Why ECA Financing?
Key Benefits
Alternative source of • Not tying up all credit lines with commercial lenders
funding
Long tenors (generally up to 10 years repayment period)
Better terms than the
Low cost (lower than commercial or bank borrowing)
bond markets
Low cost of carry (if delivery schedule is spread out over a long period of time)
No impact on bond Does not tap bond market appetite
/Loan market liquidity Access to additional liquidity
Greater scope to structure flexible package (e.g. interest rate, local currency, multicurrency options)
Financing flexibility
Flexibility in drawdown and repayment structure
No credit rating required
Limited number of
Less restrictive covenants
restrictions
No clear market requirements [so does not impinge on other commercial fund raising]
6Absa Providing Full Support Through the Lifecycle
Advisory and Structuring Arranging and Execution Funding and Operation
Understand detailed funding Advise on how to leverage the Once the commercial Given the current market
needs for each project: supplier tender process in order to contract(s) have been agreed, situation, we are frequently
■ Project costs and import increase bargaining power with engage with the ECAs and raising funds via funding
component the ECAs other interested parties to competition, tendering out to
arrange the financing other banks and other financial
■ Probable export country Negotiate with ECAs to achieve institutions – including the
and preferred bidder ■ Maximum tenor Complete all documentation capital markets
necessary for smooth execution
Advise on how to market ■ Maximum ECA eligible
of the ECA facility We have first class distribution
/introduce the business and amount capabilities
CAPEX programme to the ECAs ■ Minimise premium Co-ordinate with the commercial
financing facility We provide transparency
Advise on the most effective Co-ordinate with commercial through the tender process
ECA strategy to derive the best financing requirements Execute pre-agreed Risk
terms and conditions Management Strategy Deliver the funds at the most
■ Advise on ECA facility Advise the on an appropriate Risk preferable rates available in the
Management strategy (interest market at that point in time
■ Consider enhancement
rate and FX)
strategies (e.g. CIRR, Undertake the agency role
commodity linked) Often, in practice, there is overlap where necessary
■ Achieve fixed-rate, long between the Structuring and
Arranging/Execution phases Facilitate the smooth operation
term facility
of the facility during the build
period, ensuring that both
payment and risk management
issues are dealt at this time
7What Our Clients Say About Us…
“The cost achieved for this 20 year facility was lower than our National Treasury 10yr bond rate”
“Not only has the facility has provided us with low cost and long term financing, it has been an invaluable
tool for us to manage our interest rate risk and foreign currency exposure”
“Other banks simply provide financing, but Barclays has gone beyond that to create a solution to our funding
needs. I see them as more than a just bank – they are our long term funding advisor.”
“ This is the lowest cost of long term financing we have ever achieved and are ever likely to get”
Source: Quotes from the Government of South Africa
Mr Chris Wells, the Company’s Acting Group Chief Executive, says:
“We are pleased to have leveraged the benefits of the ECA Umbrella Facility to secure competitively
priced financing with long tenors”
“In the prevailing complex market conditions the flexibility provided by an alternative source of
financing represents an invaluable tool in implementing our long-term growth strategy”
“The bottom line is that we are accessing a deep pool of alternative funding at a price which is
comparable to the domestic bond market”
Source: Quotes from Transnet
“With the support of Barclays we have been to achieve an affordable, flexible, timely and cost effective
solution for the Government of Ghana”
Source: Quote from the Government of Ghana
18ECA – Our Sub-Saharan Credentials Demonstrate Our
Capabilities
Ghana Zambia Ethiopia Kenya Tanzania
PROJECT
MAAMBA
Govt of Ghana Ghana Cocoa Board Govt of Ghana Govt of Zambia Ethiopian Airlines Kenya Airways Govt of Tanzania Govt of Tanzania
USD 101m USD 200m USD 200m Up to USD 2.8bn USD 540m USD 300m USD 430m USD 1.0bn USD 40m
ECIC-backed facility Medium Term ECGD-backed facility Umbrella Structured ECA-backed facility Financing of Financing of Umbrella Structured Structured L/C and
SHEP4 Programme Trade Finance Facility Affordable Housing ECA Facility 2x150MW Power Plant 3 Boeing 5 Boeing ECA Facility Loan facility
Arranger and Lender Initial MLA/Bookrunner Arranger & Agent Arranger & Agent Lead Arranger / Agent
2012 2012 UNDER MANDATE UNDER MANDATE UNDER MANDATE 2003 2002 - 2008 UNDER MANDATE 2000
Mozambique
Govt of Ghana Ghana Cocoa Board Kenya Electricity
Generating Company
USD 175m USD 1.5bn
ECGD-backed facility Short Term USD 5bn
7 district hospitals Trade Finance Facility Financial Advisor and Sasol New Energy
Arranger Services
Initial Lead Arranger Advisory for
October 2012 2012 UNDER MANDATE Financing of
Gas power plant
UNDER MANDATE
Nigeria Zimbabwe
South Africa
C&I Leasing Makomo Resources
USD 4.4m USD 10m
ECIC Facility SMT ECIC backed Govt of South Africa
Crew transport vessels financing NT1,2,3 South African Airways Transnet SANRAL
USD 2.6bn
Arranger & Agent Arranger & Agent Re-Structured USD 345m ZAR 78bn USD 1.0bn
2013 2012 Multicurrency Financing of Umbrella Structured Umbrella Structured
ECGD Facility 3 Airbus ECA Facility ECA Facility
Sole Advisor & MLA Arranger & Agent Sole Advisor/Arranger Sole Advisor/Arranger
Angola Namibia Lesotho 2000-2020 2003 2007-2012 2009-2014
PROJECT
SEAGOLD
TAAG Sonangol Natura Energy Liqhobong Telkom Xstrata South Africa Eskom Shaft Sinkers Mainstream
Diamond Project
USD 580m USD 100m USD 2.5bn USD 150m USD 1.6bn USD 1.0bn USD 40-50bn USD 260m ECIC USD 1.0bn
Financing of Financing of 13 fixed ECA Backed Facility USD 75m Umbrella Structured ECA Backed Facility Multi-sourced Backed Facility Advisory and Arranger
7 Boeing & rotary wing aircraft Syndicated Loan HFO Power Plant ECIC-Backed ECA Facitliy 2x150MW Power Plant ECA Financing 7 Renewables Projects
Project Finance Sole Adviser
Arranger & Agent Arranger & Agent Joint MLA Sole Advisor /Arranger ECA advisory work & Bookrunner
2006-2007 2005-2006 2008 UNDER MANDATE UNDER MANDATE 2010-2015 UNDER MANDATE 2012 2010 UNDER MANDATE
11Case Study: National Treasury of South Africa (“NT”)
Highly structured, 20 year ECA facility covering a USD 2.6bn procurement programme
NT’s key concerns
Crowding out
REPUBLIC OF
SOUTH AFRICA (“NT1”)
Affordability and management of large debt raising
USD 2.6bn Structured
Multicurrency ECGD Facility Lack of long-term appetite for South Africa
Sole Mandated Lead Arranger Long-term debt exposures
And Sole Lender
REPUBLIC OF SOUTH AFRICA 2000-2007
Effective strategy for risk management
USD 2.6billion Long-term operation of facility
Structured Multi-currency Little existing debt for benchmarking and creditworthiness
ECGD Facility REPUBLIC OF
SOUTH AFRICA (“NT2”) Little experience of accessing the ECA market
Sole Mandated Lead Arranger USD 2.6bn Repackaged Key achievements
Multicurrency ECGD Facility
and Sole Lender
Multi currency loan
Sole Mandated Lead Arranger
2000-2020
And Sole Lender
2007-2020
Tenor extended beyond OECD rulings (20yr door-to-door)
Ability to create tranches within the loan facility
Transaction background Ability to proactively manage currency and interest rate exposure
NT had a USD 2.6bn procurement programme spanning 14 Loan denominated in gold
years No cost of carry
Before this deal, the largest transaction concluded by the NT Savings of over USD150m for the NT through the life of the facility, including:
had been GBP 300m. This transaction was 9 times larger
■ Interest Rate / FX optionality post signature
NT had serious concerns about the size of the transaction and
■ Multi-currency ECA financing
its affordability
■ No additional premium paid
14Bus Rapid Transit
31Bus Rapid Transit
Local Government planning/implementing bus rapid transit projects
In most countries that have implemented the bus rapid transit systems, the funding model
has been based on the following mix:
Municipal Own
Revenues
National Treasury Grants Private funding
Borrowing (loans)
Allocations ECA/Commercial banks
Municipal bonds
Absa currently appointed as Mandated Lead Arranger and ECA Advisor for Rustenburg
Local Municipality
Absa role in BRT projects:
■ ECA advisor/arranger of funding for vehicles
■ Bridge funding for PTIS grant
■ Hedging of funding for vehicles
■ Automated fare collection systemsConclusion
We are the “GO TO” bank in South Africa:
■ For Public Sector and all your Infrastructure Finance
Export Credit Agency backed finance
Project Finance
Debt Capital Markets
Loan capital Markets
Risk Management Solutions
33Thank You- Questions
Disclaimer This brochure/document/material/report/communication/commentary (this commentary) has been prepared by the corporate and investment banking division of Absa Bank Limited – a registered bank in the Republic of South Africa with company registration number: 1986/004794/06 and with its registered office at: Absa Towers West, 15 Troye Street, Johannesburg, Republic of South Africa (Absa). Absa is regulated by the South African Reserve Bank. Absa has issued this commentary for information purposes only and You must not regard this as a prospectus for any security or financial Product or transaction. Absa does not expressly, tacitly or by implication represent, recommend or propose that the securities and/or financial or investment Products or services (the Products) referred to in this commentary are appropriate and/or suitable for Your particular investment objectives or financial situation or needs. This commentary is not, nor is it intended to be, advice as defined and/or contemplated in Financial Advisory and Intermediary Services Act, 37 of 2002, (FAIS Act) or any other financial, investment, trading, tax, legal, accounting, retirement, actuarial or other professional advice or service whatsoever (advice). You have to obtain Your own advice prior to making any decision or taking any action whatsoever based hereon and Absa disclaims any liability for any direct, indirect or consequential damage or losses that You may suffer from using or relying on the information contained herein even if notified of the possibility of such damage or loss and irrespective of whether or not You have obtained independent advice. This commentary is neither an offer to sell nor a solicitation of an offer to buy any of the Products, which shall always be subject to Absa’s internal approvals and a formal agreement between You and Absa. Any pricing included in this commentary is only indicative and is not binding as such on Absa. All the risks and significant issues related to or associated with the Products are not disclosed and therefore, prior to investing or transacting, You should fully understand the Products and any risks and significant issues related to or associated with them. The Products may involve a high degree of risk including, but not limited to, the risk of (a) low or no investment returns, (b) capital loss, (c) counterparty or issuer default, (d) adverse or unanticipated financial market fluctuations, (e) inflation and (f) currency exchange. The value of any Product may fluctuate daily as a result of these risks. Absa does not predict actual results, performances and/or financial returns and no assurances, warranties or guarantees are given in this regard. The indicative summaries of the Products provided herein may be amended, superseded or replaced by subsequent summaries without notice. The information, views and opinions expressed herein are compiled from or based on trade and statistical services or other third party sources believed by Absa to be reliable and are therefore provided and expressed in good faith. Absa gives no recommendation, guide, warranty, representation, undertaking or guarantee concerning the accuracy, adequacy and/or completeness of the information or any view or opinion provided or expressed herein. Any information on past financial returns, modeling or back-testing is no indication of future returns. Absa makes no representation on the reasonableness of the assumptions made within or the accuracy or completeness of any modeling or back-testing. All opinions, views and estimates are given as of the date hereof and are subject to change without notice. Absa expressly disclaims any liability for any damage or loss as a result of errors or omissions in the information, data or views contained or expressed herein even if notified of the possibility of such damage or loss. Absa does not warrant or guarantee merchantability, non- infringement of third party rights or fitness for a particular use and/or purpose. Absa, its affiliates and individuals associated with them may (in various capacities) have positions or deal in securities (or related derivative securities), financial Products or investments identical or similar to the Products. Absa intends to make this commentary available in South Africa to persons who are financial services providers as defined in the FAIS Act, as well as to other investment and financial professionals who have professional experience in financial and investment matters. You should contract and execute transactions through an Absa Bank Limited branch or affiliate in Your home jurisdiction unless local regulations permit otherwise. Absa Bank Limited is a licensed Financial Services Provider. Absa has taken no action that would permit a public offering of the Products in any jurisdiction in which action for that purpose is required. The Products shall only be offered and the offering material shall only be distributed in or from any jurisdiction in circumstances which will result in compliance with any applicable laws and regulations and which will not impose any obligation on Absa or any of its affiliates. In this commentary reference is made to various indices. The publishers and sponsors of those indices (the publishers and sponsors) do not endorse, sponsor or promote the Products and make no warranty, guarantee, representation or other assurance (express, tacit or implied) relating to the indices. The publishers and sponsors make no warranties (including merchantability and fitness for purpose). The publishers and sponsors shall not incur any liability in respect of any damage or loss that You may suffer as a result of investing in a Product even if notified of the possibility of such damage or loss. The publishers and sponsors may amend the composition or calculation of indices and have no obligation to have regard to Your or Absa’s need in this regard. The information and views contained in this commentary are proprietary to Absa and are protected by copyright under the Berne Convention. In terms of the Copyright Act, 98 of 1978, as amended, no part of this commentary may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, electronic scanning, recording, or by any information storage or retrieval system, without the prior permission in writing from Absa. The illegal or attempted illegal copying or use of this information or views may result in criminal or civil legal liability. Absa Bank Limited, Reg. No. 1986/004794/06. Authorised Financial Services Provider. Registered Credit Provider, Reg. No. NCRCP7.
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