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On August 15, 2023, New Development Bank (NDB) successfully issued its debut ZAR bond in the South African bond market, becoming the highest rated issuer to issue in this market since 2015.

The book was well supported, with over R2.5bn in bids across both the 3- and 5-year tranches allowing NDB to exercise its option to upsize the trade from R1bn to R1.5bn. 94% of bids were within or lower than price guidance, with the outcome representing the tightest spreads achieved by any non-Government issuer in the South African Debt Capital Markets in 2023.

The orderbook was well diversified with 71% of bids being allocated to institutional investors and the remainder taken up by local banks.

Mr. Leslie Maasdorp, NDB Vice-President and Chief Financial Officer commented that “NDB is seeking to increase its presence in the local capital markets of its member countries, to fund its robust portfolio of local currency loans. The proceeds will be used to fund infrastructure and sustainable development projects in South Africa and the successful outcome sets the benchmark for future issuances by NDB”.

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
Amount ZAR 500,000,000 ZAR 1,000,000,000
Tenor 3 years 5 years
Trade/Auction Date August 15, 2023 August 15, 2023
Issuance/Settlement Date August 21, 2023 August 21, 2023
Maturity Date August 21, 2026 August 21, 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.