LONDON - The Republic of South Africa is working with Rand Merchant Bank and Standard Bank on its planned local currency sukuk, said two people familiar with the matter.
The exact timing of the domestic sukuk issuance as well as its size and maturity have not yet been decided, said the first person.
Regional and international banks pitched for a role on the upcoming issuance, said the second person, adding the sovereign chose to go with the two local banks.
In its recent budget review, the Treasury highlighted the government’s intention to issue a rand-denominated sukuk during FY 2021/2022 to diversify sources of funding and access new investors.
The National Treasury would neither confirm nor deny whether both lenders were on the planned issuance.
“Details will be communicated once the issuance process is finalized,” a National Treasury spokesperson said in an email to Salaam Gateway.
The spokesperson declined to elaborate further.
RMB said it does not respond to market speculation and will only confirm or deny involvement in a transaction once a public announcement has been made.
Standard Bank declined to comment.
South Africa last year expressed similar ambitions to issue a rand-denominated sukuk in the local market.
The sovereign sold its first-ever sukuk, an international U.S. dollar-denominated issue, in September 2014.
The deal consisted of a $500 million 5.75-year ijara note with a 3.90% profit rate. BNP Paribas, KFH Investment and Standard Bank arranged the transaction.
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