Date: November 2023
Issuer: The RSA Domestic Sukuk Trustee
Obligor: Republic of South Africa
Size: R20.4 billion
Structure: Al-ijara
Tenor: 5.3, 7.3, 10.3, 12.3 years
Banks: BNP Paribas, Rand Merchant Bank, BNP Paribas, Standard Bank (joint lead managers, with BBBE-E partners Theza Capital and Africa Rising Capital)
As more countries choose to access Islamic liquidity in the international sukuk market, some are also tapping local-currency demand to further diversify their funding and investor base, and cultivate new domestic capital channels.
This was the strategy behind South Africa’s debut local currency-denominated sukuk last November, marking the return of the sovereign to the Islamic market since it issued its debut international sukuk in 2014.
That dollar-denominated transaction was ground-breaking as the first issued by an African sovereign, creating the basis for other African countries to access the sukuk market, and for South Africa to return to it.
While the R20.4 billion ($1 billion) five-year sukuk is not as pioneering as the 2014 trade – other African countries including Nigeria and Senegal have previously issued local-currency sukuk – it is still a big development for the country and its domestic capital market, making it Euromoney’s best Islamic local currency deal.