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Real People Rating Outlook moves from Negative to Stable
Real People Investment Holdings (Proprietary) Limited
(Incorporated in the Republic of South Africa)
(Registration No. 1999/020093/07)
Bond Issuer Code: BIRP
(“Real People”)
REAL PEOPLE RATING OUTLOOK MOVES FROM NEGATIVE TO STABLE
Noteholders are referred to the announcement issued by Moody’s
Investors Service (Cyprus) Limited (“Moody’s”) on 08 August 2012, in
which the agency announced that it has changed the rating outlook on
the long-term Baa3.za national scale issue rating assigned to Real
People. The rating outlook has been changed from negative to stable,
with no change to the actual credit rating for Real People.
Moody’s stated that the rating outlook change “reflects a
progressive improvement in the company’s funding profile, as well as
its currently solid earnings and capital position.”
The agency indicated that in particular “Real People has broadened
and diversified its funding sources over the past few years. In
addition to its recent domestic capital-market issuance, Real
People has reduced the proportion of secured debt in its funding
structure (based on the issuer’s audited financial statements),
which eases structural subordination issues given that the senior
unsecured creditors would be legally subordinated to the claims of
secured creditors.”
Moody’s also believes that “Real People’s current earnings and
capital position support the stable outlook, despite the rating
agency’s expectations of challenging operating conditions in South
Africa over the next 12-18 months. Real People derives solid
recurring earnings in its unsecured business line focus, which
offers a buffer against any potential volatility from this high-risk
business segment. Pre-tax pre-provision profit as a percentage of
average managed assets from continuing operations stood at 16.3%
according to the issuer’s fiscal year 2012 results. High
capitalisation levels, with tangible common equity as a percentage
of tangible managed assets at 24% based on the issuer’s fiscal year
2012 results, also offers an additional buffer against a
deterioration in credit conditions.”
Please refer to the Moody’s press release for any further
information.
10 August 2012
Debt Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
Date: 10/08/2012 11:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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