South Africa’s National Treasury on Monday announced the first of three new bonds announced in the February 26 Budget. The new bond will be called the R201 bond and will be an 11-year bond maturing on December 21, 2014.
This is the first time since April 1994 that a South African government fixed interest rand-denominated bond will carry a single-digit coupon yield. A black-majority government was elected into power on April 27, 1994.
Interest will be paid semi-annually on May 21 and December 21. The first issue will be at the weekly auction on May 27, 2003. Market sources expect the launch issue to be one billion rand.
Finance Minister Trevor Manuel said on February 26 that the fiscal deficit of R29,5-billion (2,4% of GDP) would in part be funded by three new bonds.
Two plain vanilla bullet bonds maturing in 2008 and 2014 will be issued as well as a new 30-year inflation-linked bond. The inflation rate measure to be used, in common with South Africa’s other inflation-linked bonds, will be the consumer price index (CPI). – I-Net Bridge