South Africa's first Islamic bond "a resounding success"

Sep 22, 2014

South Africa has successfully concluded its debut $500 million (€388.5 million) sukuk issue, the government has announced.

South Africa has successfully concluded its debut $500 million (€388.5
million) sukuk issue, the government has announced.

The sukuk, based on an Al-Ijara structure, was priced at a coupon rate of 3.90 per cent, which represents one of the lowest
rates
ever recorded for obligations issued on international markets by
African countries since 1994, according to Ecofin news agency.

The bond, which was more than four times oversubscribed with an order book of $2.2 billion, will be listed on the Luxembourg Stock Exchange.


The government in a press release
stated
that the decision on its issue was informed by a drive to broaden the investor base and to set a benchmark for state-owned companies seeking diversified sources of funding for infrastructure development.

It added
the
transaction represents "a resounding success in building a more diversified investor base for South Africa, and further demonstrates confidence by investors in the Government's ability to maintain its sustainable macro-economic policy framework coupled with prudent fiscal management."ADNFCR-2976-ID-801749682-ADNFCR