(Updates with state guarantee in penultimate paragraph.)
Aug. 18 (Bloomberg) -- The Land Bank of South Africa wants to sell 4.5 billion rand ($424 million) of bonds by next March, seeking to increase loans to customers and extend the maturity profile of its debt.
The state-owned lender will probably sell a first tranche of bonds by the end of the month, Chief Financial Officer Lebogang Serithi said today in an interview in Johannesburg. The term of the new notes will probably be three to five years, he said.
“We used to issue less frequently but quite a lot of volume,” Serithi said. “The intention now is to actually issue more frequently and smaller volumes.”
The Land Bank is refinancing debt after spending the past six years cutting costs and improving collections on loans. The agricultural lender has four floating bonds of 3.7 billion rand in issue, of which 1.34 billion rand matures in March.
Profit increased 22 percent to 372 million rand in the year through March as performing loans climbed 25 percent to 33 billion rand, Serithi said at a presentation in Johannesburg. Non-performing loans decreased 21 percent to 1.1 billion rand, he said.
The Land Bank will aim to increase its loan book by 10 percent in the 2015 fiscal year, Serithi said in the interview.
South Africa’s Treasury increased its credit guarantee for the bank to 2 billion rand from 500 million rand on March 31, the lender said in its annual report published today.
A permanent chief executive officer will probably be appointed by next month to replace Phakamani Hadebe, who left the lender last December, Lank Bank Chairman Ben Ngubane said at the presentation. Lindiwe Mdlalose has worked as acting CEO since then.