South Africa’s Eurobonds sale is over-subscribed, an expression of investor confidence

South Africa sold $2 billion from Eurobonds issuance on international capital markets. And on Wednesday, in an emailed statement, the finance ministry said the sale will help provide finance for the government’s foreign-currency commitments.

“The South African government sees the success of the transaction as an expression of investor confidence in the country’s sound macro-economic policy framework and prudent fiscal management,” The National Treasury said.

Deutsche Bank AG, Nedbank Group Ltd., JPMorgan Chase & Co., FirstRand Ltd.’s Rand Merchant Bank and Standard Bank Group Ltd. managed the deal that was priced at 5.875 percent and 6.3 percent for the bonds maturing in 2030 and 2048 respectively.

The bonds sale was more than 1.7 times oversubscribed, which the National Treasury described as an expression of investor confidence. This is the country’s first Eurobond sale under new President Cyril Ramaphosa administration.

The Southern African country brings the amount of debt issued by African countries –Egypt, Nigeria, Kenya, Ivory Coast and Senegal– to the total of $14.8 billion of Eurobonds this year.

African countries total Eurobonds issuance since the beginning of 2018 now exceeds the average amount of the overall $18 billion Eurobonds it issued in 2018 and also exceeds the total bond sale of 2016.

African nations including Ghana are looking to sell as much debts as they can before yields increase as a result of the U.S. Federal Reserve’s policy-tightening path.