Investec Redeemable Preference Shares (IBRP1)

August 2017

Investec Bank Limited listed redeemable preference shares under share code IBRP1 on the JSE on the 20th March 2017. The IBRP1s provide investors with local dividend income with reference to the prime rate, paid quarterly.

Issuer	Investec Bank Limited ("IBL")
Market Maker	Investec Securities Proprietary Limited ("ISL")
Insturment	Redeemable, Cumulative, Preference Shares
Yield	57% of Prime (currently 3.99% effective based on prime rate of 7%)
Dividends	Accrued daily, payable quarterly in arrears in March, June, September and December
Term	4 years from initial issuance, with active market making
Redemption date	March 2021
Issue price	R1,000 plus accrued dividends

Who should invest?

Investors seeking attractive after tax income returns from a low risk investment.
What is the term and liquidity of investment?

Although the IBRP1s are issued for a term of 4 years, Investec Securities Proprietary Limited as market maker will encourage and maintain a high degree of liquidity.
What is the return?

The IBRP1’s accrue dividend income at a rate of 57% of Prime payable quarterly. This equates to a rate of 3.99% at the current Prime rate. A comparable interest bearing investment would have to yield 5.80% for individuals and 5.54% for corporate investors in order to match the return offered by the IBRP1’s after tax, assuming the maximum tax rate of 45% and dividend withholding tax rate of 20%.
How will it be valued?

The market maker will maintain a bid price equal to the nominal plus accrued dividend (subject to 5bps spread). IBRP1s will be redeemed at the nominal amount on the redemption date. Below is a price graph of the previous comparable instrument issued by Investec Limited.
Where do they rank?

The IBRP1s are redeemable, cumulative, preference shares which rank in priority to perpetual preference shares and ordinary equity of the issuer.
What fees are charged?

There are no fees for the investor’s account. The issuer will pay intermediaries a distribution fee of 0.3% pa (exVAT). When purchased in the secondary market,standard STT costs may be payable as well as brokerage, depending on your stockbroker. Please contact your stockbroker in this regard.
How do I buy the IBRP1s?

Investors can either purchase IBRP1s in the secondary market or can subscribe for the IBRP1s when a further offer is being made by Investec Bank Limited, in both cases via a stockbroker who is a registered member firm of the JSE Limited.
Arranger and Bookrunner

Investec Bank Limited will act as arranger and bookrunner in respect of any issue.

Contact us for more information

Tharina Bennie-van Dyk
Tharina Bennie-van Dyk

Head: Preference shares

+27 (11) 286 9546

[email protected]
Lourens Stapelberg
Lourens Stapelberg

Preference Shares

+27 (11) 286 9616

[email protected]
Linda Koledade
Linda Omara-Koledade

Preference Shares

+27 (11) 294 6124

[email protected]