The creation of the Good Bank

STANLIB is pleased to advise all our clients that African Bank’s Curator has recently given an update on the upcoming launch of the Good Bank, scheduled for 4 April 2016. This is in line with the curatorship announcement from 10 August 2014 by the South African Reserve Bank (SARB).

Once the Good Bank is established, it will issue new fixed interest investments (bonds), which will be listed on the JSE and are expected to begin trading from 4 April 2016. These new financial instruments will be traded in the open market. This means the market will determine the value of the Good Bank bonds.

The African Bank bond holders (retention funds) will be able to exchange their African Bank bonds for the new Good Bank bonds. This offer was ratified by creditors on 2 March 2016.

The Good Bank bonds will be held in your retention fund until such time as they can be freely traded by our fund managers. As soon as our portfolio manager is able to get fair value for these investments for our clients they will be sold and the funds switched back into the originating portfolio.

The bonds in the retention funds represent 90% of their original nominal value, as per the haircut instruction from 2014. The Curator has now offered African Bank bond holders 10% in cash of the original nominal value of the old bonds, while the remailing 80% of value will be swapped for the new Good Bank bonds.

In addition, the Curator will pay out the interest due to you on your investments from the date of curatorship to 4 April 2016. This, together with the 10% cash payment, will be released into your retention funds.

Once we have received the final ratified documentation from the Curator, we will communicate how we plan to return this interest and the cash payment to our investors’ original funds as soon as possible.

We assure you that we remain committed to your investment with STANLIB. Should you have any further questions or require additional information, please contact your financial adviser or refer to the STANLIB website, www.stanlib.com.

Regards,

Herman van Velze
Head of STANLIB Investments

Henk Viljoen
Head of Fixed Interest Franchise