BRICS Bank Issues First South African Rand Bonds to Fund Local Projects

The New Development Bank (NDB), a multilateral financial institution established by the BRICS countries (Brazil, Russia, India, China, and South Africa), has successfully issued its first South African rand bonds.

The bank raised 1.5 billion rand ($94 million) from the sale of two bonds, a 1 billion rand five-year note, and a 500 million rand three-year note, which attracted 2.67 billion rand of bids in total. The proceeds will be used to fund infrastructure and sustainable development projects in South Africa.

The NDB, which was founded in 2014 to provide an alternative source of financing for emerging markets, has been expanding its local currency lending and fundraising activities in recent years.

The NDB’s Chief Financial Officer Leslie Maasdorp said that the bank is seeking to increase its presence in the local capital markets of its member countries. He added that the bank’s bond issuance in South Africa was well received by the investors, with 94% of bids being within or lower than price guidance and the issuance rates representing the tightest spreads achieved by a non-government issuer in 2023.

The bond sale was arranged by Standard Bank Group and Absa Group, two of South Africa’s largest banks.

The NDB’s bond issuance coincides with the upcoming BRICS summit in Johannesburg next week, where the leaders of the five countries will discuss various issues of common interest, such as trade, investment, health, education and security.

The NDB is expected to play a key role in supporting the economic recovery and development of its member countries amid challenges.