- Advertisement -spot_img
28.2 C
HomeBusiness NewsSouth Africa Raises $5 Billion In Its Biggest-Ever Eurobond Sale

South Africa Raises $5 Billion In Its Biggest-Ever Eurobond Sale

- Advertisement -spot_img

South Africa raised $5 billion in its biggest Eurobond sale to date, offering returns that compensated investors for increasing fiscal problems.

SouthAfricanpresident 2

The deal on Monday was split between a $2 billion 10-year tranche and $3 billion of 30-year notes, yielding 4.85% and 5.75% respectively. The government had planned a $4 billion deal, but issued more after the transaction was 2.7 times oversubscribed, it said in a statement.
Average yields on South Africa’s dollar bonds fell 163 basis points between the start of the year and early September to 4.7%, according to JPMorgan Chase & Co.’s indexes, amid a dovish turn by global central banks. Since then they have climbed to 4.98% as concern mounts over the financial burden of highly-indebted state companies such as Eskom Holdings SOC Ltd.
“Over the last few weeks, South African external bonds have underperformed versus peers, so the cheapening up should raise sufficient interest to compensate for the increasing fiscal concerns,” Trieu Pham, a strategist at ING Groep NV in London, said before the Eurobond sale was completed.
The initial price talk was around 5.25 percent for the 10-year offering and 6.125 percent for the longer securities.
Citigroup Inc., Deutsche Bank AG, Nedbank Group Ltd., Rand Merchant Bank and Standard Bank Group Ltd. were the bookrunners.
South Africa last came to the Eurobond market in May 2018, issuing $2 billion of 12- and 30-year debt. Yields on the latter rose 9 basis points to 5.67 percent by 10:08 a.m. in London on Tuesday.
The government’s 2019 budget stipulated that it would raise the equivalent of $2 billion on international capital markets. A further $2 billion was outstanding from the 2018-19 fiscal year.

Join Our Mailing List!

* indicates required
- Advertisement -spot_img
- Advertisement -spot_img
Must Read
Related News
- Advertisement -spot_img