• You can’t eat dust

    We should insist on products that save our soil and ensure food security, says Mandi Smallhorne.

  • Terry Bell's Inside Labour

    Calling zama-zamas illegal is a case of criminalising an act of entrepreneurship.

  • 'Disappearing' data

    Faster networks and consumer habits have led to perceptions of vanishing data, says Vodacom.

All data is delayed
Loading...
See More

Namibia sells debut R850m bond

Nov 15 2012 18:58
Reuters
Windhoek - Namibia sold a debut 10-year rand bond on Thursday, attracting double the amount of bids offered, mainly from South African investors, the finance ministry said.

Finance Minister Saara Kuugongelwa-Amadhila said his government issued R850m of 10-year paper at 8.26%, higher than South Africa's near-10-year bond, which was trading at 7.20%.

Namibia, one of the world's largest diamond producers, pegs its currency to the rand in a monetary union with South Africa that also includes Swaziland and Lesotho.

The choice of a rand bond mitigates any currency risk. It is Namibia's second bond issue outside its borders after a successful $500m, 10-year issue in October last year.

The Eurobond has done well since, with the yield falling to a low of 3.75% a month ago from 5.64% in November last year.

Yields in South African debt have hit all time lows this year as a constant search for yield in emerging markets combined with South Africa's entry into a prominent global bond index on Oct. 1 to attract investors.

Thursday's issue is the first sovereign rand bond not issued by the South African government and is part of Namibia's plan to borrow between 2 and 3 billion rand over the next three years.

The money will help fund a budget deficit expected at 4.4% of GDP this year.

Kuugongelwa-Amadhila said the transaction set a benchmark for other issuers in Namibia to borrow from South Africa's established bond market.

South Africa is Namibia's main trading partner with 80% of its exports going through South Africa, while Namibia imports 60% of its consumables from South Africa.
namibia  |  bonds

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
1 comment
Comments have been closed for this article.
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Applying for a loan via social media is:

Previous results · Suggest a vote

Loading...