Investec Capital Markets has provided the acquisition finance to facilitate the R1.5 billion acquisition by Stella Group Limited, the Australian buyer of Protea Hotel Corporation (Pty) Ltd, according to Daya Moodley, Head of Acquisition Finance.

He pointed to recent transactions in which Investec participated including financing for the sale of the V&A waterfront, the issue of R3 billion of preference shares to fund the Alexander Forbes/Actis public-to-private de-listing and finance for Royal Bafokeng Holdings to become the principle shareholder in MB Technologies.

"Despite talk in the markets, appetite here for leveraged transactions hasn't changed – for South African banks, they're not the flavour of the month, but our staple diet," Moodley added.

He dismissed concerns that a rising interest rate environment would dampen deal flow for South African banks.

"Even if demand for high-yield debt funding overseas is falling off, expertise in negotiating local exchange controls, navigating tax law and delivering preference share financing means domestic banks have an advantage over international, bulge bracket players. We don't see an end to the pipeline here," he said.

While banks have historically shunned high levels of gearing for companies in the travel and leisure sector, Moodley said Investec is bullish on the country's prospects for 2010 and beyond.

"This made it easy for us to act quickly to close the Protea deal within tight deadlines. "We initially met Stella Group's request for bridging finance and shortly thereafter delivered the term financing for the group."

Moodley said he saw the transaction as an example of how Investec sets itself apart from competitors, banking difficult deals in time frames generally considered over-ambitious or impossible on the back of Investec's nimble structures and seamless access to expertise and decision makers.