RMB raises $3bn in South African sovereign bonds
Rand Merchant Bank (RMB) was appointed as joint lead manager in raising $3bn worth of Republic of South Africa bonds on behalf of National Treasury.
With a final orderbook of nearly $7bn, the issuance was 2.3 times oversubscribed, evidence of robust investor sentiment for the credit.
Two tranches were issued: $1.4bn of 10-year notes at a 5.875% yield, as well as $1.6bn of 30-year notes at a yield of 7.30%. This was 37.5 basis points and 45 basis points respectively below initial price thoughts, thereby achieving lower interest rates for the issuer.
The dollar denominated bonds are rated Ba2 / BB- / BB- by Moody’s, S&P and Fitch respectively and are to be listed on the Luxembourg Stock Exchange.
Lwandile Nene, senior transactor in RMB’s International Debt Capital Markets team, said: “The capital raise was particularly successful against a global backdrop of heightened market volatility, falling emerging market bond prices and rising short term interest rates.
“We achieved this strong result as a function of South Africa’s regular investor engagement giving the issuer maximum flexibility to execute a transaction when an issuance window is most constructive.”
He added that the issuance was a further fillip for the country and follows Moody's recent revision of South Africa's outlook to ‘stable’ from ‘negative’ on our improved fiscal outlook.