South Africa’s National Treasury pleased with the oversubscribed new bonds, but the country’s borrowing costs remain elevated

SOUTH AFRICA - Report 02 Oct 2019 by Iraj Abedian

The South African government has been able to raise money through the issuance of bonds since the late-1990s. Last week, the National Treasury announced that government had successfully placed US$5 billion worth of bonds in the international capital market, comprised of 10-year bonds, (maturing in 2029) as well as 30-year bonds (maturing in 2049), with US$2 billion and US$3 billion placed in these respectively. Moreover, according to the Treasury, favorable pricing and a sizeable order book enabled government to pre-fund an additional US$1 billion over the planned US$4 billion, while at the same time reducing future borrowing need. Although the National Treasury has communicated its delight at the success of its latest bond offering in the international capital markets, South Africa’s cost of borrowing remains high.

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