Standard in R2.4bn home loan deal with partners (Dec 10, 2007)

Standard Bank has concluded a R2.4-billion home loan securitisation issue to help three financial institutions meet their Financial Sector Charter obligations.

This is a first for the South African market.

The Siyakha Fund (meaning we are building ), comprising R2.4-billion worth of low-income housing loans established by Standard Bank, has been structured as a private placement and issued to Liberty Life, Old Mutual and Investec Bank.

They will each receive equal portions of the issue.

Standard Bank’s Kennedy Bungane said: “This transaction is the first securitisation in South Africa of low-income housing loans, a new innovation for the South African debt capital markets.

“It is a landmark transaction in terms of utilising securitisation technology as a mechanism to enable financial institutions provide funding in respect of low income housing and thereby gain charter points.”

On conclusion of the charter in October 2003, Standard Bank committed to help those charter co- signatories whose business models precluded them from being able to directly provide housing finance to lower-income individuals to meet their charter obligations.

“Standard Bank is in the process of fulfilling its charter commitment to provide housing loans to the lower-income market.

“This has allowed us to package our surplus low-income housing loans and offer them to our charter partners,” said Bungane.

In the four years since the charter’s inception , Standard Bank has provided housing finance of R10.7- billion to the low-income housing market .

The target for the industry is R32-billion in low-income housing loans by 2008.