22/02/2021

On 11 February 2021, SAFA closed a transaction for the issuance of $1 billion of a new May 2034 benchmark bond. The bonds settled on 18 February 2021.

The deal was unique for a number of reasons. This bond is the longest benchmark bond SAFA has issued and received the largest interest from offshore investors.

SAFA has been gradually lengthening the maturity profile of its bond issuance as its debt outstanding grows. Currently, SAFA has approximately $25 billion of term debt outstanding, up from $10 billion in 2012 where the longest maturity was 9 years – a May 2021 bond, due to mature in 3 months’ time.

This new transaction saw over 50% of the bonds issued to offshore investors, the highest single deal allocation in a SAFA primary markets transaction. Investors have been attracted to SAFA bonds due to the interest rate and term offered. There were over 40 bidders in the deal from 12 countries including new investors to SAFA.

During the 2020-21 financial year, SAFA has now issued approximately $5 billion of its forecast $6.25 billion funding requirement to meet new money and refinancing needs, including nearly $1 billion in a non-benchmark May 2040 issue, the longest bond SAFA has issued.

Andrew Kennedy – Director, Treasury Services