South Africa issues $2bn bonds in global markets – National Treasury
South Africa on Tuesday successfully placed $2 billion in notes maturing in 2030 and 2048 in the international capital markets, the National Treasury said on Wednesday.
The Treasury said the total issuance consisted of $1.4-billion on the 12-year tranche and $600-million on the 30-year paper. The 12-year bond priced at a coupon rate of 5.875 percent, representing a spread of 280.5 basis points above the 10-year US Treasury benchmark bond.
The 30-year bond priced at 6.3 percent , a spread of 310.1 basis points above the 30-year US Treasury benchmark bond.
The transaction was more than 1.7 times oversubscribed in aggregate with investor demand from the United States, the United Kingdom, Europe, the Middle East and Asia.
"The South African government sees the success of the transaction as an expression of investor confidence in the country’s sound macro-economic policy framework and prudent fiscal management," the Treasury said.
In its 2018 budget review in February, the Treasury said it planned to raise $9-billion from international capital markets as part of South Africa’s annual borrowing requirement over the medium term.
On Wednesday, it said the proceeds from the bond issuance would be used to finance government’s foreign currency commitments.
Deutsche Bank/ Nedbank, as a consortium, as well as JP Morgan, Rand Merchant Bank and Standard Bank were joint bookrunners for the sale. The appointment included each bank’s black economic empowerment partners, namely RHO Capital and Pamoja Capital, Dew Partners, Basis Points Capital, and Africa Rising Capital respectively.
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