Financial services company Rand Merchant Bank (RMB) has unveiled the Intengo marketplace, allowing users to issue debt instruments through online auctions.
Debt instruments are assets that individuals, companies or governments use to raise capital or to generate investment income. Some examples include bonds, debentures, leases, certificates, bills of exchange and promissory notes.
RMB says in SA, the market infrastructure for the issuance, clearing, settlement and trading of corporate debt instruments is characterised by complex manual processes and increasingly dated technology.
Intengo looks to solve this complexity by offering a more liquid and transparent digital marketplace, it states.
Emrie Brown, head of banking division at RMB, says Intengo’s goal is to provide the bank’s corporate and institutional clients that participate in fixed income auctions with a seamless experience that offers issuers real-time insights into the auction process.
“Intengo will augment both the origination capabilities, as well as the investment opportunities for our issuers and investors as clients in the primary and secondary market,” states Brown,
“By streamlining the processes and providing market transparency, Intengo aims to attract more corporate issuers to utilise the debt capital markets to raise funding. Also, the upcoming secondary marketplace module will assist investors with more accurate price discovery, resulting in deeper pools of liquidity.”
Intengo was originally incubated by RMB, and developed in partnership with Group Treasury.
Brown emphasises the complex nature of issuing debt instruments resulted in operational inefficiencies and high costs for participants, which caused pedestrian growth of the corporate bond market.
“Unlike our equity and government bond markets, which have deep pools of liquidity and provide accurate price discovery, the South African corporate debt capital market is illiquid and is not conducive to accurate price discovery. Nor is it transparent as it should be.”
According to RMB, Aspen Pharmacare is the first corporate to utilise the Intengo marketplace, raising R410 million in a recent bond auction.
Michael Shuttleworth, group executive for treasury at Aspen Pharmacare, comments: “The process was quicker and offered more transparency than previous bonds issued. It allowed us to track the progress of the auction in real-time, and ultimately secure market-related prices.”
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