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S. Africa launches bonds at int'l capital markets

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(Globalpost/GlobalPost)

S. Africa launches bonds at int'l capital markets

JOHANNESBURG, July 18 (Xinhua) -- South Africa has successfully concluded a 30-year one-billion-U.S.-dollar and a 12-year 500- million-U.S.-dollar bond issuance at the international capital markets, it was announced on Friday.

The dollar bond was priced at a coupon (interest rate) of 5.37 percent which represents a spread of 220 basis points above the 30- year U.S. Treasury's benchmark bond, the National Treasury said.

The euro bond was priced at a coupon (interest rate) of 3.75 percent which represents a spread of 225 basis points above the 12- year euro swap rate.

The global investor base was primarily located in Europe and the U.S., the Treasury said.

Both transactions were more than three times oversubscribed.

"The South African government sees the success of the transaction as an expression of investor confidence in the country' s stable political environment, sound macro-economic policy framework and prudent fiscal management," said the Treasury.

This issuance forms part of South Africa's 2014/15 financing programme. A provision is made in the Budget Review 2014 for an amount of 1.5 billion U.S. dollars equivalent to be raised from the international capital markets to partially finance the government's foreign currency commitments.

"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," said Minister of Finance Nhlanhla Nene.

http://www.globalpost.com/dispatch/news/xinhua-news-agency/140718/s-africa-launches-bonds-at-intl-capital-markets