South Africa on Thursday successfully priced and concluded a $1-billion 30-year, as well as a €500-million 12-year, bond issuance in the international capital markets, as part of its 2014/15 financing programme, National Treasury announced on Friday.
The 2014 Budget Review made provision for $1.5-billion to be raised from international capital markets to partially finance government’s foreign currency commitments, National Treasury noted.
Both transactions were more than three times oversubscribed, with government stating that the transaction was an expression of investor confidence in the country’s stable political environment, sound macro-economic policy framework and prudent fiscal management.
“[However], while we are pleased with the confidence that the investors have shown in the sovereign, we are cognisant of our immediate challenges and can, therefore, not afford to be complacent as a country,” Finance Minister Nhlanhla Nene commented.
The dollar bond was priced at a coupon, or interest rate, of 5.375%, which represented a spread of 220 basis points above the 30-year US Treasury’s benchmark bond, while the euro bond was priced at a coupon of 3.75%, representing a spread of 225 basis points above the 12-year euro swap rate.
The global investor base was primarily located in Europe and the US.