NDB makes a strong return to South African Bond Market with successful ZAR 1.3 bln bond issuance

On December 5, 2023, New Development Bank (NDB) returned to the South African bond market with a second successful ZAR bond issuance in the year.

The book was well supported with over ZAR 1.6 bln in bids across both the 3- and 5-year tranches enabling NDB to exercise its option to upsize the trade from ZAR 1 bln to ZAR 1.3 bln. The 3-year tranche priced at the tight end of guidance, 5bps tighter than the last auction. The 5-year tranche cleared at the midpoint of guidance with 97% of bids being within or lower than price guidance. The orderbook was well diversified with bids being allocated equally to institutional investors and the local banks.

Mr. Leslie Maasdorp, NDB Vice-President and Chief Financial Officer commented that “NDB is committed to delivering on its mandate of providing the option of local currency funding for infrastructure and sustainable development projects in its member countries. This issuance builds on the inaugural issuance in August this year as the Bank establishes itself as a regular issuer in the local capital markets.”

Bond Summary Terms

Issuer
New Development Bank (NDB)

Issuer rating
AA+ (S&P) / AA (Fitch)

Currency
ZAR

Listing
Johannesburg Stock Exchange

Interest Rate Profile
Floating rate

Pricing Benchmark
3M JIBAR

Amount
ZAR 500,000,000
ZAR 831,000,000

Tenor
3 years
5 years

Pricing Spread
90 bps
110 bps

Trade/Auction Date
December 5, 2023
December 5, 2023

Issuance/Settlement Date
December 8, 2023
December 8, 2023

Maturity Date
December 8, 2026
December 8, 2028

Arrangers / Dealers
Absa Corporate and Investment Bank, Standard Bank of South Africa Limited

Background information

New Development Bank was established with the purpose of mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging market economies and developing countries, complementing the efforts of multilateral and regional financial institutions for global growth and development. In 2021, NDB initiated membership expansion and admitted Bangladesh, Egypt, United Arab Emirates and Uruguay as its new member countries.