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SA sells first Eurobond in Ramaphosa era

Treasury says the success of the transaction is seen as investor confidence in the South African economy.

South Africa sold its first Eurobond under new President Cyril Ramaphosa, as investors weighed progress in fiscal reforms against a deteriorating backdrop for emerging-market debt.

Africa’s most industrialised economy raised $2 billion (R25 billion) from notes maturing in 2030 and 2048 priced at 5.87%  and 6.3% respectively, the National Treasury said in an emailed statement. Investors placed orders for 1.7 times that amount, it said.

“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.

South Africa’s rand has gained about 15% since mid-November, the most globally, as Ramaphosa, then deputy president and a former businessman and lawyer, manoeuvred to succeed Jacob Zuma as president. Standard Chartered and Goldman Sachs, among others, have recently recommended long positions in South African assets as the new administration moved to curb the budget deficit, cut debt and stimulate growth.

Deutsche Bank AG, Nedbank, JPMorgan Chase & Co., FirstRand’s Rand Merchant Bank and Standard Bank managed Tuesday’s deal.

© 2018 Bloomberg

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