South Africa Raises $5 Billion on World Bond Market After High Demand

The South African Treasury has raised $5 billion from the sale of two new bonds in international markets, with strong demand beforehand allowing it to pre-fund $1 billion more than originally planned, it said on Tuesday.

“The South African government sees the success of the transaction, believed to be the largest ever out of Sub-Saharan Africa, as an expression of investor confidence in the country’s sound macro-economic policy framework and prudent fiscal management,” the National Treasury said in a statement.

The two tranches, of $2 and $3 billion dollars, will mature in 2029 and 2049 respectively. The transaction was 2.71 oversubscribed with investor demand across the globe, the treasury said.

“Due to favorable pricing and a sizeable order book, the Republic was able to pre-fund an additional US$1 billion over the planned US$4 billion. Pre-funding is the early issuance of an amount planned to be issued in future years. This is done to take advantage of good pricing and favourable market conditions while reducing future borrowing need.”