GCR withdraws the GBL02 Senior Unsecured Notes Ratings on Full Redemption of the Notes

16 Oct 2018 In Rating Notifications, Market Alerts

GCR withdraws the GBL02 Senior Unsecured Notes Ratings on Full Redemption of the Notes

Johannesburg, 16 October 2018—Global Credit Ratings (“GCR”) has withdrawn the final, public long-term credit ratings accorded to the following Senior Unsecured Floating Rate Notes issued by Grindrod Bank Limited (the “Issuer” or “GBL”) under the Issuer’s Domestic Medium-Term Note (“DMTN”) Programme, following the full redemption of the Notes:

  • ZAR 160m, Senior Floating Rate Notes, maturing 15 October 2018, stock code…………GBL02;
  • ZAR 100m, Senior Floating Rate Notes, maturing 15 October 2018, stock code…………GBL02 - Tap

RATING RATIONALE

GBL is a subsidiary (96.6%) of Grindrod Limited, an established freight and financial services group listed on the Johannesburg Stock Exchange (“JSE”). GBL issued the R160m Senior Unsecured Floating Rate Notes in October 2015, followed by the tap issue of an additional R100m in June 2017, under its R1bn DMTN Programme. The Issuer redeemed an aggregate of R260,000,000 of the GBL02 Notes at the Maturity Date on 15 October 2018. Following the capital redemption, the GBL02 Notes were paid in full. Accordingly, GCR has withdrawn the ratings accorded to the GBL02 and GBL02 - Tap Notes listed above.

The final, public credit ratings accorded to the GBL02 and GBL02 - Tap Notes related to ultimate payment of interest and principal (as opposed to timely, akin to an expected loss rating, which is a function of probability of default and loss severity).

RATINGS HISTORY

Stock code
Initial Rating
Long Term Rating
Short Term Rating
Outlook
GBL02
20 May 2016
A-(ZA)
n.a
Stable
GBL02 - Tap
05 June 2017
A-(ZA)
n.a
Stable
Stock code
Last Rating
Long Term Rating
Short Term Rating
Outlook
GBL02
06 June 2018
A-(ZA)
n.a
Stable
GBL02 - Tap
06 June 2018
A-(ZA)
n.a
Stable

ANALYTICAL CONTACTS

Tinashe Mujuru Gary Nyoni
Senior Structured Finance Analyst Junior Structured Finance Analyst
+27 11 784 1771 +27 11 784 1771
.(JavaScript must be enabled to view this email address) .(JavaScript must be enabled to view this email address)
   
Yohan Assous  
Sector Head: Structured Finance Ratings  
+27 11 784 1771  
.(JavaScript must be enabled to view this email address)  

 

APPLICABLE METHODOLOGIES AND RELATED RESEARCH

  • Global Structurally Enhanced Corporate Bonds Rating Criteria (Sep’17);
  • Global Criteria for Rating Banks and Other Financial Institutions (Mar’17);
  • South Africa Bank Statistical Bulletin (Dec’17);
  • Grindrod Bank Limited Financial Institutions Rating Report (Apr’18);
  • Grindrod Bank Limited Rating Announcement (Apr’18); and
  • Grindrod Bank Limited’s Guaranteed Notes – Tap Issuance (Jun’17).

RATING LIMITATIONS AND DISCLAIMERS

ALL GCR’S CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: http://GLOBALRATINGS.NET/UNDERSTANDING-RATINGS. IN ADDITION, GCR’S RATING SCALES AND DEFINITIONS ARE ALSO AVAILABLE FOR DOWNLOAD AT THE FOLLOWING LINK:  http://GLOBALRATINGS.NET/RATINGS-INFO/RATING-SCALES-DEFINITIONS. GCR’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, PUBLICATION TERMS AND CONDITIONS AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE AT http://GLOBALRATINGS.NET.

 

 

 

 

GLOSSARY OF TERMS/ACRONYMS USED IN THIS DOCUMENT AS PER GCR’S STRUCTURED FINANCE GLOSSARY
Capital The sum of money that is used to generate proceeds.
Credit A contractual agreement in which a borrower receives something of value now, and agrees to repay the lender at some date in the future, generally with interest. The term also refers to the borrowing capacity of an individual or company
Credit Rating An opinion regarding the creditworthiness of an entity, a security or financial instrument, or an issuer of securities or financial instruments, using an established and defined ranking system of rating categories.
Default A default occurs when: 1.) The Borrower is unable to repay its debt obligations in full; 2.) A credit-loss event such as charge-off, specific provision or distressed restructuring involving the forgiveness or postponement of obligations; 3.) The borrower is past due more than X days on any debt obligations as defined in the transaction documents; 4.) The obligor has filed for bankruptcy or similar protection from creditors.
Floating Rate Notes Debt securities that have a periodic interest rate reset in relation to the reference rate, i.e. JIBAR.
Issuer The party indebted or the person making repayments for its borrowings.
Long-Term Rating A long term rating reflects an issuer’s ability to meet its financial obligations over the following three to five year period, including interest payments and debt redemptions. This encompasses an evaluation of the organisation’s current financial position, as well as how the position may change in the future with regard to meeting longer term financial obligations.
Loss A tangible or intangible, financial or non-financial loss of economic value.
Principal The total amount borrowed or lent, e.g. the face value of a bond, excluding interest.
Redemption The repurchase of a bond at maturity by the issuer.
Senior A security that has a higher repayment priority than junior securities.
Short-Term Rating A short term rating is an opinion of an issuer’s ability to meet all financial obligations over the upcoming 12 month period, including interest payments and debt redemptions.
Stock Code A unique code allocated to a publicly listed security.
Ultimate Payment A measure of the principal debt, interest, fees and expenses being repaid over a period of time determined by recoveries.

For a detailed glossary of terms, please click here.

 

 

 

SALIENT FEATURES OF ACCORDED RATINGS

GCR affirms that a.) no part of the ratings was influenced by any other business activities of the credit rating agency; b.) the ratings were based solely on the merits of the rated entity, security or financial instrument being rated; c.) such ratings were an independent evaluation of the risks and merits of the rated entity, security or financial instrument; and d.) the validity of the ratings is for a maximum of 12 months, or earlier as indicated by the applicable credit ratings document.

The Servicer participated in the rating process via face-to-face meetings and other written correspondence.

The credit ratings have been disclosed to the Servicer.

The ratings above were solicited by, or on behalf of the rated client, and therefore, GCR has been compensated for the provision of the ratings.

The information received from the Issuer and other reliable third parties to accord the credit ratings included:

  • Proof of payment on Issuer’s bank statement.

 

 

 

 

 

ALL GCR CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS, TERMS OF USE OF SUCH RATINGS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS, TERMS OF USE AND DISCLAIMERS BY FOLLOWING THIS LINK:HTTP://GLOBALRATINGS.NET/UNDERSTANDINGRATINGS. IN ADDITION, RATING SCALES AND DEFINITIONS ARE AVAILABLE ON GCR’S PUBLIC WEB SITE AT WWW.GLOBALRATINGS.NET/RATINGSINFORMATION. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. GCR'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE UNDERSTANDING RATINGS SECTION OF THIS SITE.

CREDIT RATINGS ISSUED AND RESEARCH PUBLICATIONS PUBLISHED BY GCR, ARE GCR’S OPINIONS, AS AT THE DATE OF ISSUE OR PUBLICATION THEREOF, OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. GCR DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL AND/OR FINANCIAL OBLIGATIONS AS THEY BECOME DUE. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: FRAUD, MARKET LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND GCR’S OPINIONS INCLUDED IN GCR’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND GCR’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND GCR’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL OR HOLD PARTICULAR SECURITIES. NEITHER GCR’S CREDIT RATINGS, NOR ITS PUBLICATIONS, COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. GCR ISSUES ITS CREDIT RATINGS AND PUBLISHES GCR’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING OR SALE.

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