South Africa has successfully priced and concluded a 1.25 billion U.S. dollars 10-year bond issuance in the international capital market, the National Treasury said on Friday.
The bond was priced at a coupon (interest rate) of 4.875 percent, which represents a spread of 335 basis points above the 10-year U.S. Treasury's benchmark bond, it said.
The Treasury said the global investor base was primarily located in Europe and the United States, and the transaction was more than two times oversubscribed.
"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," it said.
"This issuance forms part of South Africa's 2016/17 financing program," added the Treasury.
This came after rating agency Standard & Poor warned that South Africa's sovereign credit would be downgraded to junk status due to political "upheavals" in the country.
The government's borrowing requirement over the medium-term amounts to 5.5 billion dollars equivalent, which includes 1 billion dollars carried over from 2015/16.
The proceeds of the bond will partially finance the government' s foreign currency commitments of 6.4 billion dollars over the medium-term, said the Treasury.
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