South Africa Sells $2 Billion of Overseas Bonds Due in 12 YearsJaco Visser and Janice Kew
South Africa sold $2 billion of bonds due 2025 in its first international offering in 20 months, according to a person familiar with the transaction.
The country issued the bonds to yield 315 basis points, or 3.15 percentage points, above U.S. Treasuries, said the person who asked not to be identified because he isn’t allowed to speak publicly. South Africa is rated BBB, the second-lowest investment grade, by Standard & Poor’s and one level higher by Moody’s Investors Service.
“Now is the right time,” National Treasury Director-General Lungisa Fuzile, said today in the capital, Pretoria. The country had initially planned to sell $1.5 billion, according to Fuzile.
South Africa issued $1.5 billion of 4.67 percent 2024 bonds in January 2012 to yield 4.665 percent, or 270 basis points above U.S. Treasuries. Yields on the securities rose 17 basis points to 5.55 percent at 4:43 p.m. New York time.
The central bank forecast the nation’s economy, Africa’s biggest, will expand 2 percent this year after expanding 2.58 percent in 2012 as labor unrest in mines shaves 0.3 percentage point off economic growth, President Jacob Zuma said in June. South Africa, which has the world’s largest-known reserves of platinum and chrome and is the sixth-largest producer of gold, relies on minerals for more than 50 percent of its exports.
Deutsche Bank AG, Standard Bank Group Ltd. and FirstRand Ltd.’s Rand Merchant Bank unit are managing the sale, according to the person.