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Debt has never been simple, but the shift from JIBAR to ZARONIA has added a whole new layer of complexity.

In this episode of Ghost Stories, The Finance Ghost is joined by Ian Norden of Intengo Market to unpack what South Africa’s new benchmark rate means for borrowers, lenders and treasury teams, and why debt management is becoming increasingly data-intensive.

From covenant tracking and hedging strategies to AI-powered administration and access to capital markets, the discussion explores the real-world challenges facing CFOs and treasurers. Ian explains how Intengo is helping companies move beyond spreadsheets, improve governance and unlock funding opportunities in a rapidly evolving debt landscape.

In this episode:

• Why the transition from JIBAR to ZARONIA is changing the way debt is managed
• The hidden operational risks that come with growing debt portfolios
• How poor administration can affect lender relationships and funding outcomes
• The role of AI in treasury management, covenant tracking and debt reporting
• How Intengo helps corporates access funding while reducing complexity and manual effort

This podcast has been sponsored by STADIO, but The Finance Ghost was allowed to ask whichever questions he felt were most pertinent for an investor audience. Please always do your own research and do not treat this as an endorsement of the stock.

Read the transcript:

The Finance Ghost: Welcome to this episode of the Ghost Stories podcast, and today we will be learning a lot more about the complexity of debt in the corporate space and how to address it, which is going to be really interesting.  

There’s something out there called ZARONIA. It sounds a bit like a town in a fantasy novel, but it’s actually the South African Rand Overnight Index Average. We’re grateful here for the acronym, which is a little bit easier.

It replaced the Johannesburg Interbank Average Rate (JIBAR). It has a different calculation methodology, but it does mean that a lot of other stuff has changed too, and is changing, in terms of how debt needs to be managed by companies and lenders. 

Now, to help us understand more about this very interesting world of actually managing debt, we’ve got Ian Norden here of Intengo Market. Day in and day out (and probably a few weekends as well), he’s trying to figure out how to make this easier for companies in a complex debt environment.  

So, Ian, welcome back to the show. Not your first one. We’ve had Intengo in Ghost Mail before. Lovely to have you and the team back. 

Why don’t you kick us straight off with an understanding of the sources of complexity – what actually makes this world so difficult? 

Ian Norden: Hi, Ghost. Yes, thanks. Good to be back. Lucky number three for me on the podcast series. 

I think debt in isolation, in one loan agreement or one bank facility, is probably not complex. We can get into ZARONIA and the exact reasons it makes things more complex. 

But what becomes complex is the burden that comes with the accumulation of small, recurring obligations. 

So, say you’ve got a loan or a bank facility or an overdraft, and then you want a loan, or a revolving credit facility as well, or your banker comes and says, “Well, let’s give you a guaranteed bank facility for longer-term debt.” 

All of these together, once they start adding up, become more complex. 

Now, as you’ve very eloquently summarised and explained what ZARONIA is, the practical challenge of ZARONIA is, because it’s an actual rate, it looks back and says, “What was the actual rate at which banks transacted with each other yesterday?” That makes it very practical, not theoretical, but it happens every single day. 

So, if you historically had a loan that reset four times a year, say you had a floating interest rate loan, it would most often reference three-month JIBAR, and that would be four interest rates you’d have to capture. 

Now you have 365. You have to capture them. You have to store them. You have to be able to show a calculation to your shareholders or stakeholders if they ask for it. So, you can see how that now compounds over multiple facilities very quickly. 

The Finance Ghost: Very interesting, Ian. So, ZARONIA is certainly bringing a lot more complexity to this. As you say, lots of small, recurring obligations and lots of interest rate calculations. That all sounds like work.  

And on top of that, you’ve got other complexity, right? It’s not just that. Because, yes, that’s just the rate, that’s maybe what’s changed. But underneath that is a whole lot of other things that have always been complex about debt, right? Covenants, forex, all sorts of things. 

Ian Norden: Good point and spot on as usual. We haven’t even touched on that. So, you’ve got the hedging complexity. Again, just the availability of ZARONIA hedges is going to be an interesting transition. 

As we see more and more ZARONIA instruments being issued in the capital markets, hedges will become better priced and more available. 

But then again, the complexity of sourcing them is half the challenge. Now you’ve got to manage those hedges. 

And then you’ve got covenant certificates. So, you’ve got to track different covenants across multiple facilities. 

I think we’re talking more in general now about the complexity of debt, not just ZARONIA, because these, again, have always been there.  

But when you add these extra things and you say, “I’ve got to now be focusing on sourcing the correct rate,” you don’t want to be worrying about sending the wrong covenant certificate to the wrong party or sending a covenant certificate late. 

These aren’t breaches (to send a certificate late), but it certainly creates friction and it doesn’t paint you in a good light with your lender.  

Then you add in cross-currency. Maybe you’ve got some foreign currency revenue you have to look at. Do you have reliable FX feeds? Do you have reliable cross-currency swap hedges? Do you have the most accurate, up-to-date hedging available to you so that you know you’ve got best execution? 

As you can see, if you’re a large, listed Top 40, this is much more easily managed by a large, sophisticated team. But if you’re a company that’s growing up and you still have a relatively lean, or even no treasury team (maybe you’ve just got a finance manager or a finance director), this can become very, very intensive very quickly. 

The Finance Ghost: Okay, so lots of complexity there. That’s the message. And as you say, it’s not always easy, particularly for finance teams to deal with this kind of stuff – even in big corporates actually, let alone in your mid-sized corporates, where there’s even more of a burden relative to the size of the thing. And we can talk about that as well.  

But there’s an opportunity, obviously (and this is where you come in at Intengo), to provide solutions into this space. But what is the real-world cost of not looking at those solutions? Not solving for the complexity? Having an inefficient relationship with lenders, for example – or even worse, outright governance failures, which we see less often in the private sector than in the public sector in South Africa)?  

There’s a real cost with this stuff, right? It actually costs you money if you are not managing this debt properly. 

Ian Norden: Yes, we must remember that markets price risk. So, credit risk is certainly a big component of lending, but there are other risks at play, and we’re talking here about operational risk.  

As I mentioned earlier, the late covenant isn’t a breach, but I’ve been in conversations with bankers where it does create a headache. Because that banker’s got to go back to credit and explain that it wasn’t a breach and it was just a lapse in admin.  

That then leaves a bit of a bad taste in credit’s mouth. And maybe next time that banker goes to credit with that deal, there’s a history there or a memory from the credit team around, “Well, we could lend to this counter, but they’re not the most admin-friendly for us.” So, you have to think of that dynamic. 

And then, we can look at the municipalities in South Africa over the last few years, how poor governance can really turn you off lending completely. And I think we are seeing that still with misappropriation. We won’t get into who’s who, but it’s probably the most public example of how poor governance can ultimately lead to no lending coming to you. 

The Finance Ghost: So, Ian, you’ve mentioned there that markets price risk. It’s such a powerful statement because that’s exactly how financial markets work. At the end of the day, everything we do is just the pricing of risk versus return.  

And in the world of debt, your return, inevitably, is relatively capped. Sometimes things might be participating instruments or whatever, but generally speaking, lenders are managing downside risk, whereas equity investors are thinking about the upside potential. 

So, it stands to reason that, if you are dealing with lenders, they will care a lot about how you manage your risk.  

Can we say that doing this properly (actually having these systems in place and everything else) can reduce your cost of funding? Can it have a real cost benefit if you are perceived as being a better-quality borrower by the lenders on the other side of the table? 

Ian Norden: I think we must start with the fact that better governance and better admin in your treasury team or your finance department doesn’t reduce the credit risk of your company. 

The answer maybe everyone wants to hear is, “Yes, definitely, improve your admin and you’ll get cheaper funding.” But I think let’s look at the knock-on effects.  

If you’re a borrower and you’ve previously been turned off by the potential complexity of accessing capital markets – because you think there’s now going to be an influx of debt instruments and you’re struggling with (or you’re already managing) your small portfolio – an automated AI admin system can significantly help you overcome that ‘insecurity’, if you want to call it that. So, now you’ve got the confidence to access new markets.  

What that does is it leads to improved competition and diversity of funding, and those two factors we’ve seen can reduce the cost of borrowing. Again, depending on the name and the creditworthiness. But all else equal, increased competition should bring down the price of something. And that’s certainly a big benefit of having strong governance and strong automation in your treasury debt management. 

The Finance Ghost: Something you’ve raised with me before is this gap between perceived complexity versus actual complexity.  

I know that this is part of where you operate with your Concierge offering and just helping corporates actually realise that, as much as this sounds difficult and scary – especially for mid-sized, because obviously your big corporate treasury teams as much as they’re looking for efficiencies, they understand debt markets, they’re in there already – there are a lot of mid-sized corporates that are probably not really accessing debt markets the way they could.  

Maybe they have one historical banking relationship, one term loan, and they’ve never really paid much attention to whether or not they can actually optimise that part of their balance sheet. 

So, just help us understand how Intengo’s Concierge offering and all your broader solutions actually really help to plug this gap. Because I think that’s what CFOs and treasurers want to understand: why should they be speaking to you? Why should they be getting this? 

Ian Norden: We see our role as taking a lot of the heavy lifting away from you, but we also see our role as becoming a bit of an AI partner. Let’s not say advisor, let’s say partner. Because you might be able to go to your Copilot on Excel and say, “Right, work out how much debt I owe.”  

But in our experience (and I’m going to talk specifically to AI because a big part of our solution is AI-driven), a big part of AI is the reliability of the data underlying it. So, if you’re not receiving credible data, we have a direct feed from the Reserve Bank for a daily ZARONIA rate, and that is the rate, so we know it’s real and we know it’s correct, and we manage that sourcing risk for you. Because you, as a treasurer, want to be making strategic decisions. You don’t want to be spending all your time on operational complexity and trying to check your rates. 

Imagine a world where your Enterprise Resource Planning system (ERP) doesn’t reconcile with your bank account and doesn’t reconcile with your feed? How do you know which day in that 90-day period is the rate that was rounded to half a decimal incorrectly?  

So, you can see how this complexity might sound simple. “Oh, I’ve just got to get a rate and work it out.” But the knock-on effects can become very real, very quickly, and very complex to solve without the right tool. 

If we move that to the second part of debt management, like covenant reporting and tracking or hedging, we can bring in a different way to manage your hedging risk, for example, by doing those valuations for you in the same system where your debt and interest rates are being calculated and in the same system where we have FX feeds. So, another part of our role is to consolidate your information. 

You mentioned the larger companies with the larger treasury teams. Yes, they have their handle on the admin, but they still have multiple systems. I think what AI is doing at the moment is creating a huge amount of tech for a treasurer to now navigate. So, what Intengo Concierge tries to do is create a kind of front-end dashboard.  

Now, we can sit in front of a treasury management system (we aren’t directly a TMS), or we can sit behind one, but our goal is not to create extra screens. It’s to consolidate with the reliable feeds and a reliable database.  

And the last part is then that the scale of AI automation is covered by us, and the cost of that is managed by us. So, using Copilot in Excel is great. But our AI model that reads loan agreements is 14 different agents talking to one another.  

And it’s really about the edge cases. It’s about, “What if my covenant is worded slightly differently to the one that Microsoft or another company thought might be how covenants are drafted?” 

Our team has spent a lot of time with a lot of diverse corporates, from small, medium to large, understanding those edge cases, so you can trust that system a lot better and you’re not spending the opex on it.  

And you also have a person to talk to. We haven’t talked about human intervention yet, but we spend a lot of time thinking about when the human should come in. And equally, you have us as humans on the other side to talk to if things do go wrong. 

The Finance Ghost: Yeah, Ian, having been in a financial services environment where I, for my sins, early in my career, was very involved in a systems implementation that didn’t go as smoothly as perhaps it should have, I’ve seen how tough those recons are and how difficult it is to go and figure out an issue.  

It sounds ridiculous to people who aren’t involved in this space. It’s like, “Just go to, you know, cell C12 in your spreadsheet. What’s the problem? Just go plug it in.”  

Ian Norden: [laughing] 

The Finance Ghost: That is not how these organisations work and these treasury management systems. As you say, it’s not that straightforward. So that is a very good point.  

I like what you said there, as well, about the AI models that have been trained specifically for the edge cases. Because, as anyone who has engaged with AI will know (and really, that should be everyone by now. You should at least be playing with it), it hallucinates at every opportunity – if you use the typical free models or you don’t actually use the right thing and you haven’t trained it properly. 

And hallucinating a small fact is already bad enough, but hallucinating a rate or a covenant or something else is not going to endear you to the credit committee at your friendly local lender who will be debating how to price your loan. So, all of this makes a lot of sense. 

Ian, let’s make this practical now. Without actually naming any clients, are there any examples that you can perhaps give us of a business you’ve worked with and the types of problems they were facing before you became involved there, from an Intengo perspective? 

Ian Norden: Absolutely. I think there’s a very real and recent one. We worked with an established corporate who’s still growing and very reliant on debt, and we saw the spreadsheet that they were using for managing the interest payments alone. It was an impressive spreadsheet, but it was probably 15 to 20 tabs of different facilities across multiple banks. 

I think it’s important to say that nothing was broken and there weren’t any defaults or breaches, but you could just see how fragmented the administration had become over time. Because whilst interest was in this sheet, you had covenant tracking somewhere else, and you had lender communication, often through email or phone calls, and then key dates were reliant on someone putting that into an Outlook calendar or just remembering them and taking note of them.  

I think the challenge here for that client isn’t credit risk – they’re highly creditworthy and they weren’t in default or missing payments or covenants – but the operational complexity just increases the risk of that maybe happening. 

So, it was great for us because it really proved the value of consolidation. Putting this all into a single environment, having our AI readers come in, process the agreements, pull out all the information into one place, but then having one system that can monitor the calculations, audit those calculations and provide the covenant certificates automatically and provide a ready-to-send email or even send that email. That provides much better visibility (and, I think, much more peace of mind) to management. 

One extra very interesting point was that the benefit wasn’t limited to the borrower here. The banker who introduced us (well, one of the bankers. We have many banking relationships), he received very positive feedback from the client because their interactions were now smoother. The reporting was not reliant on the manual process, it was much more consistent, and they were spending less time doing that.  

So, I think that’s something to also highlight: good governance for a treasury isn’t just creating value for their funding process, it’s creating value across the whole funding ecosystem. 

The Finance Ghost: Ian, when I hear you speak about a spreadsheet like that, I just immediately think about risk. So, as you say, it’s not like they were in default or not meeting covenants or that something was particularly broken or there was a calculation error. But what if someone just sends that spreadsheet to one of their lenders and then reveals the pricing they get on everything to basically everyone? Or if it falls into the wrong hands – or gets sent to a competitor?  

I mean, these are extreme examples, but this stuff does happen. I think there was a recent story, actually, of an international investment bank leaking its entire pipeline basically out into the market because it was all sitting on a spreadsheet.  

So, I would imagine that part of the Intengo value-add is to actually have a system that allows for things like proper access control, where you can’t just attach the wrong file to an email and suddenly you’ve shared a whole lot of personal information or business information with the wrong person. 

Ian Norden: Yeah, that’s a very fair comment. I think, to your point, mistakes do happen and obviously this could be quite catastrophic for your funding book if you told everyone what you were paying to everyone else. And that’s very much where we play a part.  

We are owned by a very large banking group, at Intengo, and we inherit a lot of incredibly robust security in our systems and our software, and that is a direct pass-through to the client. So, while a lot of the software we’re providing is through a cloud service, I think it does add an extra layer of security that there’s not a file floating around. It’s a system and it’s secured. 

The other nice thing about how we implement is we rely on the existing controls. So, if your company has a multi-factor system, or generally we use the Microsoft front end, so if you’re using Microsoft software already, the login becomes seamless. It’s not another password you have to remember. So, it’s a very easy implementation and it inherits any existing protocols your company needs to use software. 

The Finance Ghost: Ian, you’ve given us some really good examples around administrative improvements, governance improvements, risk improvements for that matter. But Intengo isn’t just a debt management business, because part of the value-add here is that your solution often helps clients actually access funding. So it’s not just about managing it once it’s there, it’s about making it easier to bring that funding in. And as we know, funding is the lifeblood of any business really, in whatever form it comes. 

So perhaps just walk us through how Intengo has actually helped clients and generally helps clients get lenders across the line and bring them to the party. 

Ian Norden: I think that’s where the story becomes interesting because when you look at one solution in a vacuum, it can obviously do a certain amount of good and make a certain amount of improvements, but when you combine it into an ecosystem, you can really start seeing multiplier effects. 

So if we go back to Intengo’s history, our bread and butter is facilitating listed bond auctions and commercial paper fundraisers. And I think we’re coming up for R450 billion now of bids processed through that system. 

And when we look at the market, we say, well, what is stopping mid-sized corporates from tapping into that? We’ve got asset managers on our system who are saying to us, “Oh, I’d like to lend to that name, do you know that name?” 

We’ll know that name and we’ll approach that corporate and they will be hesitant because I’d almost call it the fear of the unknown. What is that lender going to expect from me? What are they going to want me to provide that’s different? And what is the operational burden that I’m going to take on for the relative or perceived improvement in cost of funding? 

If we can make that admin the same, then it’s a straight pass-through of an improved funding rate – if that lender were to offer an improved funding rate. But in most cases they offer a diverse approach to funding and we have seen that sometimes funding rates can be improved. So we need to be thinking, “What does that mid-cap need from us to tap into that?” 

And the thought of multiple lenders, multiple debt instruments, covenant obligations is not scary anymore when you’ve got an automated system that can scale and really improve your access to multiple funders with minimal operational increase. 

Access, I think, is then only one part of the puzzle. So the concierge solution is really designed to be your lifecycle partner. 

So it’s not just the admin of accessing that funding, it’s then the access of servicing that funding. In the same way that you’re familiar with servicing your bank funding, business as usual can be your focus. 

So instead of hiring additional treasury specialists and increasing headcount and buying multiple systems and building complex internal processes with new governance, a finance team can now leverage technology and automation to achieve an almost identical outcome, but in a much more cost-effective way without increasing risk. 

And I think the result is Intengo doesn’t magically make you a better credit, but we certainly make it easier to access a wider funding ecosystem. And increased competition for funding can often lead to better outcomes for borrowers. 

The Finance Ghost: It sounds like you’re carrying a lot of the hard work around the feeds; the AI that’s been built; the understanding of the complexities of these things. It sounds like it would save a lot of time for someone on the other side at a client.  

And is that the idea here, in terms of how Intengo justifies its existence in these corporates and why it makes economic sense? 

Ian Norden: We certainly think so. I’m going to jump on something you said around using the AI in the business. We see a lot of corporates afraid to start with AI because of that question you’ve touched on – how do you explain to people that you’re using it?  

There was a very interesting article on Moneyweb this weekend around how AI is now in the boardroom. Why I want to bring that up is because we must differentiate between AI doing everything and AI supporting humans in their day-to-day. 

This is important is because we’re not going to build a system (for you or anyone) that’s going to work out the interest and send that payment directly through your bank account to those people. We’re going to build a system that does a calculation, presents it to you at the right time and lets you apply your judgment.  

Because treasurers will intuitively have a sense of, “Ooh, this looks wrong,” or “I’ve done this so many times and this isn’t right.” Yes, we’ve talked about they might not know exactly which cell, if it was C12 or B12, was the error, but we want to bring that human experience in.  

And, in our experience of bringing AI technology and automation to companies, it also lands a lot easier when you say, “Here’s how your team can use AI to support their roles. We’re not replacing anyone, no one’s getting fired. However, maybe your next hire, you don’t have to make, because your team has operational leverage now.” 

The Finance Ghost: I guess that leads me then to I suppose a cheeky question, which is: “Does this product then pay for itself?” 

Ian Norden: So, Ghost, with that context, we have to look at value, not cost. Let’s talk about the value of this to your organisation. We obviously want to look at what the replacement is. Often, it’s a full-time employee (FTE) cost, and we certainly try to be a fraction of that.  

Now, those hires can also vary, depending on the skill involved. But we look at it and say, “If you’ve got a relatively straightforward treasury operation, the fee will be relatively good value for what it is.” 

And then there are add-ons. If you want to add a derivative package onto that or an FX feed package (we have seen certain corporates paying a lot for just FX feeds from a particular system), we can incorporate that as an extra cost very, very cost-effectively.  

And as you can see, you can start building this up and you add, “Okay, I’ve got less than five debt instruments,” then you’re in our Essentials package range. Or you’re in our Enterprise package range, because what we haven’t talked about is portfolio lenders. So, maybe you’re actually looking at this tool to manage your investment portfolio and people who owe you money. Then we have a different model.  

So, you can see it’s quite diverse in client type, and the value for money, I think, scales proportionately. 

The Finance Ghost: Yeah, absolutely. So, if you are a corporate treasurer or CFO and you’ve been listening to this and thinking, “Hmm, that’s interesting.” Or, for that matter, any exec in a mid-sized corporate who has debt or looking to break into that market, looking to perhaps improve your cost of funding and just create some competitive tension among lenders and actually just improve the way you deal with this stuff, then all of these are good reasons to contact Ian and have a conversation. 

Ian, as we start to bring this to a close, it’s a connected ecosystem, right? That’s the point here. You’ve got the banks lending, you’ve got the borrowers, and you’ve got other service providers who can be involved in that value chain, like Intengo Market. That’s really what we’re talking about here. 

To understand that ecosystem and to understand the role you play, what is the one thing that you would want a treasurer, CFO or executive to take away from this discussion when they think about Intengo and specifically when they consider reaching out to set up a chat? 

Ian Norden: Sho. Only one? I can immediately hear my whole team in my head shouting at me… 

The Finance Ghost: I mean, I’ll give you two. 

Ian Norden: [laughing] I think you’ve touched on the first point: the ecosystem matters. So, we’re going to pull back to a global trend. There’s a shift in capital allocation from public to private. Are you, as a company, benefiting from that?  

There is more liquidity than ever outside of the banks looking for a home in your company. Those investors are going to want a certain standard for that capital to make it to you. Are you able to provide that standard? That would be the first one. 

I think the second one would be linked to that. It’s much easier to get there than you think. And with the right partner, with the right tech and with the right use of AI – AI and tech and digitisation is a very, very powerful lever into this space, like it is with most things. But if you haven’t yet thought about it in your debt space, now is a great time. 

The Finance Ghost: Ian, thank you so much for sharing all of this with us. For anyone listening to this conversation who thinks there’s an opportunity here to chat to them, go to intengomarket.com.  

You’ll be speaking to the right people because, might I point out, that Intengo has been recognised as a finalist in the FinTech Association of South Africa Awards for Innovation of the Year. Very cool. Well done, Ian – and to all the team members on that side, obviously. It’s certainly not just you. 

It’s very cool to see this kind of growth, so thank you for coming and sharing more about the offering. It’s developing really quickly, so by the time we get to our subsequent podcast in a few months’ time (and some articles along the way, for those who read Ghost Mail), it’s going to be quite interesting to see how this develops and the conversations you’re having in the market. 

Thank you, Ian, and to the listeners, reach out. Chat to Intengo. I’ll make sure that the details are in the show notes. 

Ian Norden: Thanks, Ghost.