Discovery Approved for $81.6M Bond Listing

Discovery Group, led by South African businessman Adrian Gore, has received approval to list two new notes worth R1.5 billion ($81.67 million) on the Johannesburg Stock Exchange (JSE) under its domestic medium-term note program. This is a crucial milestone in the company’s funding plan.

The two newly issued bonds, as detailed in JSE filings on May 14, have nominal values of R576 million ($31.33 million) and R924 million ($50.26 million). They have floating coupon rates of the three-month Johannesburg Interbank Average Rate (JIBAR) + 1.4% and 1.59%, respectively.

These notes, which are guaranteed at 100% of their nominal value by Discovery Health Proprietary Limited and Discovery Vitality Proprietary Limited, provide an appealing opportunity for investors to participate in Discovery’s growth trajectory.

With a total program size of R10 billion ($544.56 million) and existing notes under the program totaling R9.87 billion ($537.39 million), interest on the bonds will commence on May 15, 2024.

Discovery’s bond listing demonstrates its commitment to diversifying funding sources and streamlining its capital structure. Rand Merchant Bank, a division of FirstRand Bank Limited, functioned as the bonds’ dealer, allowing Discovery to access financial markets.

This approval demonstrates confidence in Discovery’s financial health and future growth prospects, clearing the path for increased financial flexibility and strategic objectives.

Discovery Group was founded in 1992 as a medical insurer by South African businessmen Adrian Gore and Barry Swartzberg and has since grown to become one of South Africa’s largest and most diverse worldwide financial services organizations. It engages in several industries, including long-term and short-term insurance, asset management, savings, investment, and employee benefits.

Under Gore’s leadership, Discovery’s normalized operating profit for the fiscal year ending June 30, 2023 increased by 24 percent to R11.66 billion ($634.56 million), up from R9.384 billion ($510.54 million) the previous year. Normalized headline earnings increased 32% to R7.68 billion ($417.82 million) from R5.816 billion ($316.53 million).

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