Intengo Market, a digital corporate debt marketplace that was previously incubated by RMB is looking to use its digital fixed income platform to revolutionise the way corporate debt instruments are issued and traded in SA and the rest of the continent.
Intengo, which was only launched in October 2021, has been moved out of the incubation auspices of corporate and investment bank Rand Merchant Bank (RMB), and will now be run as a standalone business with its own CEO in Ian Norden, an actuary by trade who was appointed to head up the platform at the beginning of August.
“We’ve just hit R50bn in bids on the platform and issued about R24bn in debt,” Norden told Business Day in an interview. “That makes us the largest digital platform in this space outside of the exchanges.”
Intengo Market, which has already been used by Aspen Pharmacare to raise R410m via a recent bond issuance, is essentially a digital platform that acts as a debt issuance and trading marketplace for large creditworthy corporates and state-owned entities to raise capital through the issuance of both listed and unlisted debt. The platform allows corporates to reduce their reliance on bank funding and will allow for secondary trading before year-end, thereby deepening liquidity in an SA corporate credit market that is still dominated by private placements and off-book trades between institutional investors.
However, should Intengo Market take off the way its new CEO envisages, it could also open up the opportunity to roll out the platform’s services in the rest of Africa where corporate bond issuance is still largely in its infancy. Kick-starting a Pan African corporate bond market could also have several downstream positives ranging from deepening funding pools for business expansion while attracting new institutional investors to new fixed income returns in a new corporate credit market frontier.
That could quite easily result in Intengo Market potentially attracting offshore institutional investors to Africa’s corporate debt market by providing them with a standardised and trusted process on a tailored digital platform that is supported by a blue-chip banking group. It also provides a transparent legal framework, thereby providing a reassuring degree of legislative familiarity to international institutional investors.
“If things go well in SA we’ll take it into the rest of the continent in time and use it to open up access to new corporate issuance flows,” said Norden. “That’s the dream but it needs to be tested here before we can take it to the rest of the continent or other parts of the world.”
In the meantime Intengo Market’s more immediate goal is to encourage other SA banks to use the platform by moving assets such as corporate debt, project bonds or infrastructure-related debt facilities off of their balance sheets via the secondary market, which will be launched before end-2022. That would help deleverage their balance sheets, thereby allowing local banks to fund yet more projects, something that will be key to SA’s planned infrastructure investment drive.
“If other banks are looking for a tool to distribute assets that they’ve funded, whether it be solar plants or wind turbines, they can use Intengo to sell off the debt facilities without having to run their own separate processes,” said Norden. “That helps solve one of the problems local banks face when funding these sorts of projects – the slow velocity of their balances sheets. By helping banks speed up their balance sheet velocity they can go on to fund other projects while at the same time the general liquidity in the corporate debt market is also improved.”
