30-year bond priced at 6% yield

South Africa’s $750 million (R5.2 billion) 30-year global bond issued this week was priced at a yield of 6.292%, a spread of 180 basis points above 30-year US treasuries, the Treasury said today.

Investor response to the bond was “exceedingly good” given turmoil in the Middle East. Bids received were more than four times the value of the deal, it added.

The Treasury said in its budget statement last week the government intended to borrow about $1 billion a year in global markets to maintain benchmarks in major currencies and meet part of its foreign currency commitments.

Today, it said this week’s issuance, which marks the first time South Africa has issued a bond of this duration in international capital markets, represented pre-funding for the next fiscal year beginning on April 1.

“The 2041 bond lengthens the duration of the sovereign’s dollar bond yield curve. This will establish a benchmark for other South African entities that may issue long dated bonds in the US dollar capital markets,” it said.

The Treasury said 156 investors had placed orders for the bond, with 68.6% originating from the United States, 18.2% from Europe, 11.6% from Asia and 1.6% from South America.

South Africa last week forecast a wider-than-expected budget deficit of 5.3% of GDP for the financial year ending March next year, compared with the 4.6% gap seen in October last year, sending the yield spread between the 2015 and 2026 notes to record highs.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Lockdown For
DAYS
HRS
MINS
Voting Booth
Who do you think is going to win the 2020 US election?
Please select an option Oops! Something went wrong, please try again later.
Results
Biden is going to take it
47% - 7899 votes
It's four more years for Trump
53% - 9065 votes
Vote
ZAR/USD
16.28
(-0.44)
ZAR/GBP
21.17
(-0.05)
ZAR/EUR
19.27
(-0.29)
ZAR/AUD
11.57
(-0.09)
ZAR/JPY
0.16
(-0.18)
Gold
1897.80
(-0.02)
Silver
24.17
(-1.09)
Platinum
882.00
(-1.45)
Brent Crude
41.25
(0.00)
Palladium
2357.22
(-0.42)
All Share
55201.75
(-0.25)
Top 40
50544.82
(-0.29)
Financial 15
10734.67
(-0.52)
Industrial 25
74662.93
(-0.32)
Resource 10
52483.98
(-0.15)
All JSE data delayed by at least 15 minutes morningstar logo