Increasing Deals from South African Issuers Forecasted for 2011
Standard Bank expects to see an increase in the number of offshore bond issues emerging from South Africa in 2011. This comes as the country’s international prestige is enhanced by its recent inclusion in the Brazil, Russia, India And China (BRIC) nations, as well as the high regard in which South Africa’s offshore debt issues are held.
In 2010 South African corporates made a cautious return to international markets, taking advantage of high levels of global liquidity for attractive long term funding and positive emerging market sentiment. Naspers, AngloGold, Steinhoff and Mondi issued on aggregate in excess of US$3bn in 2010, at competitive rates.
State owned entities were absent from the offshore capital markets in 2010. However, 2011 has already seen Eskom tapping the US dollar market with a 10-year US$1.75bn issue. Given the importance of the capital expenditure programme in South Africa to the country’s long-term growth path, the offshore markets will increasingly play an important role as a source of large-scale funding.
Kennedy Bungane, Standard Bank chief executive corporate and investment banking, said: “The success of this deal highlights an international trend that we are seeing whereby major international investors see the value in emerging markets and South African credit in particular. The deal also highlights the positive investment stature that South Africa is currently enjoying – a stature that is built on sound economic fundamentals, as well as being a gateway destination to the African continent.”