The New Development Bank (NDB) has 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 bond, which was issued on Tuesday, was well supported, with over R2.5 billion in bids across both the three-and five-year tranches.

This allowed the NDB to exercise its option to upsize the trade from R1 billion to R1.5 billion. Ninety-four percent 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.

"The 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," NDB Vice-President and Chief Financial Officer, Leslie Maasdorp, said.

The New Development Bank was established with the purpose of mobilising resources for infrastructure and sustainable development projects in BRICS (Brazil, Russia, India, China and South Africa) countries 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.