The National Treasury today launched a new Government of South Africa Eurobond. The Bond was launched after an extensive European roadshow during which Treasury officials met with a wide range of investors.
The Government was able to raise EUR 500 million from a wide range of European Investors. The Bond, which was oversubscribed, has a maturity of 7 years, carries an annual coupon of 7.0% and has a re-offer yield of 7.296%. It was launched at a spread of 272 bps over equivalent German Government Bonds. The bond was launched in a market where the underlying German Government Bond yields have declined from 4.75% a month earlier to 4.576% (being the underlying yield of the issue). This bond issue successfully extends our Euro maturity profile.
The successful launch of the bond confirms that South Africa is an improving credit story. Our investment grade rating has attracted the attention of a large number of new investors who are beginning to separate the South African story from that of other emerging markets. Investors have responded positively to Government's economic program as well as progress with social infrastructure delivery.