To the minerals and mobiles underpinning Africa's pacy growth over the last decade, you may soon be able to add malaria - or at least its absence. Besides the huge human cost imposed on the continent - 90 percent of the 655,000 deaths estimated worldwide in 2010 - the mosquito-borne disease is an economic millstone, draining public and private resources and hammering productivity. According to a 2001 study co-authored by U.S. economist Jeffrey Sachs, the disease imposes an annual "growth penalty" of 1.3 percentage points on afflicted states, which includes most of those south of the Sahara apart from South Africa. In Nigeria, Africa's most populous nation and its biggest oil producer, malaria is responsible for up to 25 worker days lost per person per year, or two a month, due to direct infection or the need to stay at home to nurse a sick family member, often for a week or more. In Zambia, it is the leading cause of absenteeism, accounting for more than twice as many days off as HIV/AIDS, and can consume up to 40 percent of the public health budget in cash-strapped frontline states. It may not always be thus.
The number of malaria deaths has fallen dramatically in the last decade due to increased aid spending on basic items such as insecticide-treated bed nets and drugs, the World Health Organization (WHO) says. More excitingly, the holy grail of a vaccine against a notoriously adaptable parasite no longer appears unobtainable after an experimental vaccine from GlaxoSmithKline was shown last year to halve the risk of African children getting the disease. Even before the prospect of a vaccine, companies across Africa were waking up to the commercial sense of investing in a malaria-free workforce - and the results are encouraging governments to get in on the act.
Faced with endemic malaria in the 240,000 population town around its Obuasi gold mine in Ghana, AngloGold Ashanti , the world's third largest bullion producer, launched a multi-pronged campaign of bed-nets, indoor insecticide spraying and drugs that cut infections from 79,237 in 2005 to fewer than 16,000 in 2008. The programme cost the Johannesburg-based firm $1.3 million a year, but over that time the malaria drug bill at the mine's hospital dropped from $55,000 to $9,800 a month, while work days lost each month fell from 6,983 to just 282."It really made economic sense because of the absenteeism and the cost of medication," said Steve Knowles, the head of AngloGold's anti-malaria operations.
The Ghana model is now being extended to commmunities around its mines in Democratic Republic of Congo, Tanzania, Mali and Guinea, bringing as many as 500,000 people under its umbrella. Europe's financial crisis and relatively sluggish rich-world growth have left a question mark over cash pools such as the Global Fund to Fight AIDS, Tuberculosis and Malaria that have been complementing state and private sector efforts, threatening to unravel the gains made. But Knowles said many governments were becoming increasingly aware of the mathematics of beating malaria and starting to put their own programmes in place. The prospect of an affordable vaccine is only going to increase the power of that argument for a region forecast to grow at 5.4 percent this year - even with malaria. Without it, that figure could be knocking on 7 percent."Now that they're seeing the aid funding may not be there, it's a bit of a wake-up call and governments are looking to do it themselves," Knowles said. "What difference will a vaccine make? If it comes through, it's going to be huge."
Dec 30 (Reuters Basis Point) - A surge of loans in the fourth quarter helped push Australia's total for the year to $100 billion, up 25 percent from 2012, according to Thomson Reuters Loan Pricing Corp. Bankers said a number of companies rushed deals in November and December to take advantage of strong bank liquidity and cheap pricing, mindful of the risk that Basel III capital controls could push up the cost of debt in 2014. Power company Energy Australia, property firm Lend Lease Corp Ltd and search firm Seek Ltd were among borrowers seeking to reprice their loans before the year end. Seek was looking for a A$557 million ($495.26 million) loan to refinance an existing A$450 million deal raised a little over a year earlier. But by far the largest loan of 2013 was Origin Energy Ltd's A$6.6 billion ($5.87 billion) refinancing closed in November. The deal refinanced all of the company's existing loans, including bilaterals, into one core facility. Loan margins fell steadily during the year in tandem with banks' funding costs. Lenders believe margins have slid far enough and are unlikely to drop much more unless funding costs also come down further. Even so, slow deal flow in early 2014 could start another round of margin cuts, lenders say, as demand out paces supply. At current levels, banks say the margin on a three-year loan for a BBB rated company is around 135-140 basis points, while a five-year loan is being quoted at around 165-175 basis points.
Upfront fees have steadied for investment-grade borrowers to 10 basis points per year, while sub-investment-grade companies pay at least 15 basis points per year in fees. There is also pressure for commitment fees to drop to 40-45 percent of the margin, down from the current 50 percent level. BETTER M&A PROSPECTS Merger and acquisition activity was quiet for most of 2013, except for deals such as private equity giant TPG's acquisition of poultry producer Inghams Enterprises Pty Ltd, the year's largest leveraged buyout.
Instead, private equity firms spent 2013 busily refinancing and recapitalising investments to pay dividends to shareholders including Pacific Equity Partners' Hoyts Group and Link Group. The U.S. institutional market continued to provide liquidity and more aggressive structures to leveraged companies such as Alinta Energy Ltd, Spotless Group Ltd and Hoyts. Iron ore miner Fortescue Metals Group Ltd took advantage of a window to reprice its $4.95 billon term loan B in November, barely a year after it completed the initial deal. The margin was slashed by 100 basis point to 325 basis point over Libor, saving the miner $50 million a year in interest costs. M&A bankers are hopeful of a turnaround in 2014 as confidence in the economy improves, spurred by offshore deals already announced by glove manufacturer Ansell Ltd and Seven Group Holdings Ltd.
A fierce three-way fight for dairy company Warrnambool Cheese & Butter Factory Co Holdings Ltd should also be resolved in 2014. The project finance market has enjoyed steady dealflow, including large refinancings for the AquaSure desalination project and the Sydney desalination plant. Maintaining the momentum in 2014 will be the closing of a number of public-private partnerships in the bid phase, including the North West Rail Link and Perth Stadium. In the resources sector, the $7 billon project financing for Roy Hill Holdings Pty Ltd's proposed 55 million tonnes per year iron ore mine is slated to close in the first quarter of 2014. The pipeline in New Zealand is brightening with the upcoming sale of Transpacific Industries Group Ltd's waste unit, as well as the closing of the NZ$1 billion-plus ($818.60 million) Transmission Gully road project. The New Zealand market was generally flat in 2013, dominated by refinancings arranged on a best effort or club loan basis for companies such as Chorus Ltd. A rare exception was a NZ$165 million ($135.07 million) underwriting by Bank of New Zealand for mobile operator Two Degrees Mobile Ltd. Total volume for the year was $12.3 billion, compared to the $11.5 billion completed in 2012. ($1 = 1.1247 Australian dollars) ($1 = 1.2216 New Zealand dollars)