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The BRICS Bank has issued its first South African ZAR bond since 2015, making it the issuer with the highest rating.

During its first South African bond auction, the New Development Bank, which was founded by the BRICS group of emerging economies, was successful in raising 1.5 billion ZAR, or $79 million.

The BRICS bank is now the highest rated issuer to issue in this market since 2015 thanks to the successful issuance of the first ZAR bond in the South African bond market.

During the auction for the 3- and 5-year bonds, the New Development Bank (NDB), based in Shanghai and comprised of Brazil, Russia, India, China, and South Africa, received bids totaling more than 2.5 billion ZAR. The bank was able to increase the size of the bond offering due to the high demand.

According to the official announcement, the bank sold the bonds in August 2023 and distributed 71% to institutional investors and the remaining 29% to local banks.

Leslie Maasdorp, NDB’s chief financial officer, stated that NDB “is seeking to increase its presence in the local capital markets of its member countries, to fund its strong portfolio of local currency loans.” Infrastructure and sustainable development initiatives in South Africa will be paid for with the earnings.

The bond sale coincides with the 15th Heads of State and Government of the BRICS Summit, which will take place in Johannesburg in August 2023.

The group will reportedly talk about ways to increase lending and fundraising in local currencies at the New Development Bank (NDB), or so-called BRICS bank, according to a Reuters story. Enoch Godongwana, South Africa’s finance minister, stated that using local currency will reduce the danger of the effects of foreign exchange swings.

In keeping with the summit’s theme of “BRICS and Africa,” special focus will also be dedicated to the interaction between BRICS and African nations. In addition, it is anticipated that the BRICS partners will look for ways to gain from the African Continental Free Trade Area (AfCFTA).

New Development Bank information

The New Development Bank was founded to supplement the work of multilateral and regional financial institutions for global growth and development by raising funds for infrastructure and sustainable development projects in the BRICS and other emerging market economies and developing countries. The NDB started the membership expansion process in 2021 and welcomed Uruguay, Bangladesh, Egypt, and the United Arab Emirates as new members.

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