The Kingdom of eSwatini’s government, through Absa Bank, has issued a R4 billion bond programme on the JSE debt board, marking an opportunity to introduce the country to the global investment community.
This new issuance is the latest to list under the “Protea Bonds” segment. Protea Bonds are unique in that they describe rand-denominated bond issues by foreign governments on the JSE.
“The listing on the JSE … provides an opportunity for the Kingdom to introduce itself to the international investment community. This programme will help us diversify funding sources, contribute to regional economic integration initiatives, and raise the capital required for us to meet our infrastructure and developmental needs,” said eSwatini Finance Minister Neal Rijkenberg in a statement.
In the country’s national budget speech in February, Rijkenberg said their economy was “in better shape”, with an average GDP growth of 5%, one of the lowest debt-to-GDP ratios in Africa, at 39%, and a budget deficit of only 2%, which was the lowest in the region.
“Our Sacu (Southern African Customs Union) receipts are at record highs and we will be spending more this year on infrastructure and service delivery than ever before,” he said at the time. He said while they anticipated debt to rise slightly in the new financial year, GDP growth was such that the debt-to-GDP was likely to decline further.
eSwatini’s first R400 million bond under the programme was issued at a yield to maturity of 11.875% per annum and a maturity period of three years.
This was after an initial auction took place on May 8, and the bonds mature on May 8, 2027. The listing on the JSE provides investors with a convenient and transparent platform to trade and invest in the Kingdom of eSwatini’s Protea Bond, said Rijkenberg.
He said the bond issuance marked an important step in supporting regional African development, through the local bond market.
“Choosing to list in the South African market represents a demonstration of our confidence in the South African markets given our participation in the Common Monetary Area and strong economic links with South Africa,” said Rijkenberg.
Sovereign bonds are an important tool for governments to raise funds for large and critical capital projects such as roads, power stations and hospitals.
JSE Capital Markets director Valdene Reddy said they were “thrilled the government of the Kingdom of eSwatini identified the JSE as the capital raising venue of choice, and we believe this issuance will enable the issuer to diversify its debt portfolio and access alternative funding”.
In recent years, similar bonds have been issued on the bourse, including a Namibian bond programme via Rand Merchant Bank.
“Previously, we have seen the Republic of Namibia come to the JSE to issue a Protea Bond and we would like to encourage further issuances in this unique segment, particularly from the broader African region to grow the continent’s capital markets,” said Reddy.
The JSE’s bond market is the largest and most liquid on the continent, with consistent yield above 20% since 2022. Through the Protea Bonds, the bourse aims to further bolster this position as it continues to expand its product offering, said Reddy.
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