April 12 (Reuters) – Rand Merchant Bank (RMB) has raised $3 billion in South African sovereign bonds on behalf of the National Treasury, the corporate and investment unit of FirstRand banking group said on Tuesday.
The issuance comes on the heels of Moody’s revising South Africa’s outlook to “stable” from “negative”, saying the country’s improved fiscal outlook would help the government to stabilise its debt burden over the medium term.
The transaction was 2.3 times oversubscribed, issued in two tranches, raising $1.4 billion from 10-year notes with a 5.875% coupon, and $1.6 billion from 30-year notes with a 7.30% coupon, RMB, a joint lead manager in the transaction said.
“The capital raise was particularly successful against a global backdrop of heightened market volatility, falling emerging market bond prices and rising short term interest rates,” Lwandile Nene, senior transactor in RMB’s International Debt Capital Markets team, said in a statement.
The dollar denominated bonds are rated at investment grade by rating agency Moody’s, while S&P and Fitch place them on junk status and are to be listed on the Luxembourg Stock Exchange.
The bank said it worked with Absa Bank/HSBC and Deutsche Bank/Nedbank consortiums as lead managers.
The National Treasury did not immediately respond to a request for a comment.