fixed income technical strategy note: equities
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23 March 2018
TECHNICAL STRATEGY NOTE: EQUITIES
Neels Heyneke
Senior Strategist
Tel : +27 11 535 4041
Nheyneke@Nedbank.co.za
Mehul Daya
Strategy: Research Analyst
Tel : +27 11 295 8838
MehulD@Nedbank.co.za
23 March 2018
TECHNICAL STRATEGY NOTE:
EQUITIES
NEELS HEYNEKE
Senior Strategist
Tel : +27 11 535 4041
Nheyneke@Nedbank.co.za
MEHUL DAYA
Strategy: Research Analyst
Tel : +27 11 295 8838
MehulD@Nedbank.co.za
23 March 2018
TECHNICAL STRATEGY NOTE: EQUITIES
Neels Heyneke
Senior Strategist
Tel : +27 11 535 4041
Nheyneke@Nedbank.co.za
Mehul Daya
Strategy: Research Analyst
Tel : +27 11 295 8838
MehulD@Nedbank.co.za
23 March 2018
FIXED INCOME CREDIT|SOUTH AFRICADCM TRENDS
NTHULLENG MPHAHLELE
Analyst
Tel : +27 11 294 7032
Nthullengm@Nedbank.co.za
JONES GONDO
Senior Credit Research Analyst
Tel : +27 11 295 4484
JonesG@Nedbank.co.za
DCM TRENDS | 23 MARCH 18 | PAGE 2
TABLE OF CONTENT
Overview of Nedbank’s New Credit Publications 2018 3
Issuances Volume 4
Redemptions 1H18 9
Spread Development 12
Bond Curves 16
Ratings Distribution 18
Contacts 21
ACCESS: CREDIT DATABOOK
Content
DISCLAIMER
The information furnished in this report, brochure, document, material, or communication (“the Commentary”), has been prepared by Nedbank Limited (acting through its
Nedbank Corporate and Investment Banking division), a registered bank in the Republic of South Africa, with registration number: 1951/000009/06 and having its registered
office at 135 Rivonia Road, Sandton, Johannesburg (“Nedbank”). The information contained herein may include facts relating to current events or prevailing market conditions
as at the date of this Commentary, which conditions may change and Nedbank shall be under no obligation to notify the recipient thereof or modify or amend this
Commentary. The information included herein has been obtained from various sources believed by Nedbank to be reliable and expressed in good faith, however, Nedbank
does not guarantee the accuracy and/or completeness thereof and accepts no liability in relation thereto.
Nedbank does not expressly, or by implication represent, recommend or propose that any securities and/or financial or investment products or services referred to in this
Commentary are appropriate and or/or suitable for the recipient’s particular investment objectives or financial situation. This Commentary should not be construed as
“advice” as contemplated in the Financial Advisory and Intermediary Services Act, 37 of 2002 in relation to the specified products. The recipient must obtain its own advice
prior to making any decision or taking any action whatsoever.
This Commentary is neither an offer to sell nor a solicitation of an offer to buy any of the products mentioned herein. Any offer to purchase or sell would be subject to
Nedbank’s internal approvals and agreement between the recipient and Nedbank. Any prices or levels contained herein are preliminary and indicative only and do not
represent bids or offers and may not be considered to be binding on Nedbank. All risks associated with any products mentioned herein may not be disclosed to any third party
and the recipient is obliged to ascertain all such risks prior to investing or transacting in the product or services. Products may involve a high degree of risk including but not
limited to a low or no investment return, capital loss, counterparty risk, or issuer default, adverse or unanticipated financial markets fluctuations, inflation and currency
exchange. As a result of these risks, the value of the product may fluctuate. Nedbank cannot predict actual results, performance or actual returns and no guarantee,
assurance or warranties are given in this regard. Any information relating to past financial performance is not an indication of future performance.
Nedbank does not warrant or guarantee merchantability, non-infringement or third party rights or fitness for a particular purpose. Nedbank, its affiliates and individuals
associated with them may have positions or may deal in securities or financial products or investments identical or similar to the products.
This Commentary is available to persons in the Republic of South Africa, financial services providers as defined in the FAIS Act, as well as to other investment and financial
professionals who have experience in financial and investment matters.
All rights reserved. Any unauthorized use or disclosure of this material is prohibited. This material may not be reproduced without the prior written consent of Nedbank, and
should the information be so distributed and/or used by any recipients and/or unauthorized third party, Nedbank disclaims any liability for any loss of whatsoever nature that
may be suffered by any party by relying on the information contained in this Commentary.
Certain information and views contained in this Commentary are proprietary to Nedbank and are protected under the Berne Convention and in terms of the Copyright Act 98
of 1978 as amended. Any unlawful or attempted illegal copyright or use of this information or views may result in criminal or civil legal liability.
All trademarks, service marks and logos used in this Commentary are trademarks or service marks or registered trademarks or service marks of Nedbank or its affiliates.
Nedbank Limited is a licensed Financial Services Provider and a Registered Credit Provider (FSP License Number 9363 and National Credit Provider License Number NCRCP 16).
DCM TRENDS | 23 MARCH 18 | PAGE 3
DCM Trends
We have reorganised our approach to credit research for the South African market. Our aim is to provide the market with high
quality credit perspectives which are timely, concise, and incisive.
1. DCM Trends & Databook: Essential data and statistics on South Africa’s primary debt capital market. A simple and easy-
to-read reference pack. These will be published monthly (The Databook will be available as a link in the DCM Trends
report).
2. Credit Insights: Timely, issuer-specific credit opinions that are situational or event-driven. Published on an ad hoc basis.
3. Credit Thematic Reviews: A technical or fundamental review of topical credit themes or emerging trends as they apply to
South Africa’s credit market. Published on an ad hoc basis.
4. Quarterly Commentary: A cross-cutting, contextual review of the South African economy from a credit perspective and a
critical discussion of key credit events and themes emerging over the last quarter.
CREDIT|SOUTH AFRICA
DCM Trends Credit Databook
Credit Insights Thematic Reviews
Quarterly Commentary
Monthly Publication
Ad hoc Publication
Publications 2018
DCM TRENDS | 23 MARCH 18 | PAGE 4
-
20
40
60
80
100
120
140
160
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018(YTD)
Issu
ance
Vo
lum
e ('
Rb
n)
SOE Municipalities Corporates Financials Securitisation
BOND ISSUANCES
Analysis of 2017 Issuances
10-Year Issuances Trend – 2017 issuances hit a 10-year high amid high levels of political uncertainty and low levels of economic growth
yoy Monthly Issuance Comparison – By Sector
Source: JSE, Bloomberg, Nedbank CIB
Issuance Volume 2018(YTD) :R18,47bn2017(YOY): R39,86bn (as at 31 Mar 17)
Source: JSE, Bloomberg, Nedbank CIB
-
5.0
10.0
15.0
20.0
25.0
Jan-17 Jan-18 Feb-17 Feb-18 Mar-17 Mar-18 Apr-17 Apr-18 May-17 May-18 Jun-17 Jun-18 Jul-17 Jul-18 Aug-17 Aug-18 Sep-17 Sep-18 Oct-17 Oct-18 Nov-17 Nov-18 Dec-17 Dec-18
Issu
ance
vo
lum
e (‘
Rb
n)
SOE Municipalities Corporates Financials Securitisations
79%
21%
R126bn New
Tap
0.37%
5.19%
26.60%
34.00%
15.35%
17.79%
0.60…0.10%
R126bn
< 1 Year
1- 3 Years
3-5 Years
5-7 Years
7-10 Years
10-20 Years
20-30 Years
30+ Years
NOTE:# Pricing tenor was used## Bonds <1 year are bonds callable in a year
DCM TRENDS | 23 MARCH 18 | PAGE 5
0
2
4
6
8
10
12
14
16
18
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2017 2018
Issu
ance
s V
olu
me
('R
bn
)
Bonds (Vanilla) Structured Notes
BOND ISSUANCES
Issuances Last 12 Months (LTM) – Investors still managed to gain sizable exposure to Transnet and Eskom credit through Credit-Linked Notes
Source: JSE, Bloomberg, Nedbank CIB
Appetite for credit promptly recovered in May
Fears of a technical recession in June did not slow down primary bond issuances volumes. Execution risk was managed through private placements and tap issuances
28 Feb 18 (LTM)Bonds (Vanilla) R200bnStructured Notes R47,8bn
Bond Maturity Development 2013-2017
4
5
6
7
8
9
10
2013 2014 2015 2016 2017
Mat
uri
ty (
yrs)
Average Maturity Weighted Average Maturity
Structured Notes - Type
Volume on the shorter-end of the curve is still skewed towards Corporates, REITs, and other Non-bank Financial Institutions.
SOEs and Banks provide duration, with SOEs providing limited volumes with a long duration. The Weighted Average Maturity in 2017 was 6,21 years in 2017. For reference, the modified
duration for the ALBI tracks at 7,51 years (as at 16 March 2018) .
2017 & YTD Issuances Average Tenor (Yrs) Average Volume (‘R)
Banks 9 495 383 791
Property 5 307 815 789
Corporates (excl. REITs) 4 539 214 286
Other Financial Institutions 5 451 315 789
SOEs 10 299 940 000
Credit Linked Notes Issuance Volume LTM – High issuances volume from SOC Credit-linked Notes
Heightened political uncertainty and a sovereign ratings downgrade by S&P and Fitch
3%
6%
9%
76%
2%3%
1%
R17.9bn
CPI Linked
Credit-linkednoteStructured Note
Credit-Linked
Index Linked
Mixed Rate
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
An
glo
Am
eri
can
Plc
Bar
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orl
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Bid
vest
Gro
up
Bid
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Gro
wth
po
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Pla
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Mer
ced
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Gro
up
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per
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rop
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ited
Stei
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Telk
om
Wo
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ldin
gs
New
Lo
ok
Secu
red
AB
SA
Ban
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amib
ia
Bar
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fric
a G
rou
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Cre
dit
Su
isse
AG
Dis
cove
ry
Firs
tran
d
Old
Mu
tual
Plc
Soci
ete
Gen
eral
e
Stan
dar
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ank
Cit
y o
f C
ape
Tow
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AC
SA
DB
SA
Esko
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d B
ank
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Gro
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Tran
snet
Rep
ub
lic o
f N
amib
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Rep
ub
lic o
f So
uth
Afr
ica
SOA
F
Corporates Financials Municipality SOCs Sovereign
Issu
ance
s (‘
Rm
)
Reference Entity
DCM TRENDS | 23 MARCH 18 | PAGE 6
19.35
13.41
9.00
6.545.75
5.10 4.83 4.70 4.50 4.34 4.043.38 3.21
2.50 2.50 2.40 2.26 2.00 1.85 1.76
0
5
10
15
20
25
Vo
lum
es (
'Rb
n)
Issuer
BOND ISSUANCES
Top 20 Issuers LTM – Banks, Corporates, and REITS driving bond issuance volumes
Source: JSE, Bloomberg, Nedbank CIB
Top Issuers YTD (January - March 2018) – Banks continue dominating the issuance volume tally, including capital instruments issued out of group holding companies and the refinancing of existing debt
Source: JSE, Bloomberg, Nedbank CIB
MBSA’s issuance volumes and pricing are comparable to banks.
4.50
3.00
2.402.30
2.00
1.101.00
0.76 0.75 0.73 0.680.60
0.500.40
0.30
0.03
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
Issu
ance
Vo
lum
e ('
Rb
n)
Issuer
DCM TRENDS | 23 MARCH 18 | PAGE 7
BOND ISSUANCES – 2018 YTD
Financials
Corporates
Source: JSE, Bloomberg, Nedbank CIB
Bond Code
Issuer NameStandardized
RatingTap/New
IssueDate of Issue
Expected Maturity
Pricing Tenor
Amount Issued (ZAR Bln)
Spread at issue
Reference Benchmark
Coupon Type Payment Rank
SBS60Standard Bank of South Africa
LtdAA+ New 18-Jan-18 18-Jan-23 5 1,50 156 3m Jibar Floating Sr Unsecured
FRX31 FirstRand Bank Ltd AA+ Tap 19-Jan-18 21-Jan-31 13 0,05 177 R213 Fixed Sr Unsecured
IBL77 Investec Bank Ltd AA+ Tap 19-Jan-18 25-Nov-20 3 0,18 165 3m Jibar Floating Sr Unsecured
FRX24 FirstRand Bank Ltd AA+ Tap 31-Jan-18 10-Dec-24 7 0,03 125 R186 Fixed Sr Unsecured
FRX30 FirstRand Bank Ltd AA+ Tap 31-Jan-18 31-Jan-30 12 0,07 155 R2030 Fixed Sr Unsecured
FRX32 FirstRand Bank Ltd AA+ Tap 31-Jan-18 31-Mar-32 14 0,33 164 R2032 Fixed Sr Unsecured
FRJ23 FirstRand Bank Ltd AA+ New 31-Jan-18 31-Jul-23 5 0,67 145 3m Jibar Floating Sr Unsecured
FRJ20 FirstRand Bank Ltd AA+ Tap 31-Jan-18 20-Sep-20 3 2,11 100 3m Jibar Floating Sr Unsecured
FRJ25 FirstRand Bank Ltd AA+ Tap 31-Jan-18 09-Mar-25 7 0,45 200 3m Jibar Floating Sr Unsecured
FRJ22 FirstRand Bank Ltd AA+ Tap 06-Feb-18 07-Mar-22 4 0,16 155 3m Jibar Floating Sr Unsecured
SBT201 Standard Bank Group Ltd BBB New 12-Feb-18 13-Feb-23 5 3,00 314 3m Jibar FloatingSubordinated
Unsecured
NBK44B Nedbank Ltd AA+ New 15-Feb-18 15-Feb-21 3 0,86 120 3m Jibar Floating Sr Unsecured
NBK45B Nedbank Ltd AA+ New 15-Feb-18 15-Feb-23 5 0,37 145 3m Jibar Floating Sr Unsecured
NBK46B Nedbank Ltd AA+ New 15-Feb-18 15-Aug-25 8 0,40 165 3m Jibar Floating Sr Unsecured
NBK47B Nedbank Ltd AA+ New 15-Feb-18 15-Feb-28 10 0,78 190 3m Jibar Floating Sr Unsecured
FRX32 FirstRand Bank Ltd AA+ Tap 19-Feb-18 31-Mar-32 14 0,05 194 R2032 Fixed Sr Unsecured
FRJ22 FirstRand Bank Ltd AA+ Tap 20-Feb-18 07-Mar-22 4 0,08 155 3m Jibar Floating Sr Unsecured
FRJ23 FirstRand Bank Ltd AA+ Tap 28-Feb-18 31-Jul-23 5 0,51 145 3m Jibar Floating Sr Unsecured
SBS47 Standard Bank AA+ Tap 08-Mar-18 09-Mar-18 5 0,30 184 3m Jibar Floating Sr Unsecured
INLV05 Investec Bank Ltd BB+ New 15-Mar-18 22-Mar-23 5 0,35 515 3m Jibar Floating Jr Subordinated
Bond Code
Issuer NameStandardized
RatingTap/New
IssueDate of
issueExpected Maturity
Pricing Tenor
Amount Issued (ZAR Bln)
Spread at issue (bps)
Reference Benchmark
Coupon Type Payment Rank
IPF24 Investec Property Fund Ltd A New 05-Feb-18 05-Feb-23 5 0,30 170 3m Jibar Floating Sr Unsecured
CGR38 Calgro M3 Development Ltd N/R New 13-Feb-18 13-Feb-21 3 0,03 400 3m Jibar Floating Sr Unsecured
NTC22 Clindeb Investments Pty Ltd A+ New 15-Feb-18 15-Feb-21 3 0,19 155 3m Jibar Floating Sr Unsecured
NTC23 Clindeb Investments Pty Ltd A+ New 15-Feb-18 15-Feb-23 5 0,57 175 3m Jibar Floating Sr Unsecured
HPF11 Hospitality Property Fund Ltd A+ New 19-Feb-18 31-Mar-23 5 0,60 195 3m Jibar Floating Secured
BAW29 Barloworld Ltd AA+ New 22-Feb-18 22-Feb-23 5 0,40 180 3m Jibar Floating Sr Unsecured
MBP039Mercedes-Benz South Africa Pty
LtdAAA New 23-Feb-18 23-Feb-21 3 0,50 115 3m Jibar Floating Sr Unsecured
MBP040Mercedes-Benz South Africa Pty
LtdAAA New 23-Feb-18 23-Feb-23 5 0,50 130 3m Jibar Floating Sr Unsecured
MBP039Mercedes-Benz South Africa Pty
LtdAAA New 23-Feb-18 23-Feb-21 3 0,50 115 3m Jibar Floating Sr Unsecured
MBP040Mercedes-Benz South Africa Pty
LtdAAA New 23-Feb-18 23-Feb-23 5 0,50 130 3m Jibar Floating Sr Unsecured
GRT24G Growthpoint Properties AAA New 09-Mar-18 03-Sep-23 5 0,3 139 3m Jibar FloatingSnr Unsec Green
Bond
GRT25G Growthpoint Properties AAA New 09-Mar-18 03-Sep-25 7 0,24 169 3m Jibar FloatingSnr Unsec Green
Bond
GRT26G Growthpoint Properties AAA New 09-Mar-18 03-Sep-28 10 0,56 200 3m Jibar FloatingSnr Unsec Green
Bond
RDFB13 Redefine Properties AA+ New 13-Mar-18 12-Mar-21 3 0,3 140 3m Jibar Floating Sr Unsecured
RDFB14 Redefine Properties AA+ New 13-Mar-18 12-Mar-23 5 0,43 160 3m Jibar Floating Sr Unsecured
State-Owned Enterprises
Bond Code
Issuer NameStandardized
RatingTap/New
IssueDate of issue
Expected Maturity
Pricing Tenor
Amount Issued (ZAR Bln)
Spread at issue (bps)
Reference Benchmark
Coupon Type Payment Rank
NRA028South African National Road
Agency SOC LtdAA- Tap 22-Feb-18 30-Nov-28 11 0,50 299 R186 FIXED Sr Unsecured
LBK26 Land Bank AA+ New 23-Mar-18 23-Mar-21 3 0,245 149 3m Jibar Floating Sr Unsecured
LBK27 Land Bank AA+ New 23-Mar-18 23-Mar-23 5 1,50 215 3m Jibar Floating Sr Unsecured
DCM TRENDS | 23 MARCH 18 | PAGE 8
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Vo
lum
e ('
Rm
)
2016 2017 2018
24%
76%
CP (Structured)
CP (Vanilla)
CP ISSUANCES
Monthly CP (Vanilla) Issuances Trend
Source: JSE, Bloomberg, Nedbank CIB
Vanilla vs Structured CP Issuances LTM
Source: JSE, Bloomberg, Nedbank CIB
R51.2bn
Bond Code Tap/New IssueDate of
issueExpected Maturity
Pricing Tenor (Days)
Amount Issued (ZAR Bln)
Spread at issue (bps)
IVA721 New 09-Jan 23-Apr 104 0,264 Zero coupon
IVA721 Tap 10-Jan 12-Apr 92 0,08 Zero coupon
IVA722 New 15-Jan 19-Apr 94 0,293 Zero coupon
MAQ116 New 16-Jan 09-Feb 23 0,3 Zero coupon
IVA723 New 18-Jan 26-Apr 98 0,395 Zero coupon
IVA722 Tap 22-Jan 19-Apr 87 0,15 Zero coupon
IVA723 Tap 22-Jan 26-Apr 94 0,15 Zero coupon
IPFC17 New 26-Jan 26-Apr 90 0,274 Zero coupon
MAQ117 New 31-Jan 31-Jan 360 0,46 90
IVA724 New 01-Feb 03-May 92 0,365 Zero coupon
IVA726 New 08-Feb 17-May 99 0,3 Zero coupon
CGR37 New 08-Feb 08-Feb 360 0,015 170
MAQ118 New 09-Feb 29-Apr 80 0,195 Zero coupon
IVA727 New 15-Feb 24-May 99 0,368 Zero coupon
IVA726 Tap 15-Feb 17-May 92 0,1 Zero coupon
MAQ119 Tap 19-Feb 19-Mar 30 0,3 Zero coupon
VKC23 New 20-Feb 20-Aug 180 0,14 70
VKC24 New 20-Feb 20-Feb 360 0,1 110
IVA728 New 22-Feb 31-May 98 0,237 Zero coupon
IVA729 New 22-Feb 07-Jun 105 0,22 Zero coupon
EPFC37 New 02-Mar 04-Mar 362 0,09 115
GPT44 New 06-Mar 06-Jun 90 0,50 Fixed
VKC25 New 06-Mar 05-Jun 89 0,077 55
PMM43 New 07-Mar 28-Feb 359 0,25 135
DENG77 New 13-Mar 27-Sep 198 0,02 120
DENG78 New 13-Mar 27-Sep 198 0,01 Fixed
LBK25 New 23-Mar 25-Mar 367 0,500 110
CP (Vanilla) Issuances YTD
Source: JSE, Bloomberg, Nedbank CIB
Summary of issuances2016: R27bn2017: R38,4bn2018(YTD): R6,5bn
DCM TRENDS | 23 MARCH 18 | PAGE 9
REDEMPTIONS – 1H18
Financials
Source: JSE, Bloomberg, Nedbank CIB
Corporates
Source: JSE, Bloomberg, Nedbank CIB
0
500
1000
1500
2000
2500
IBL66 IBL22 ABFN07 ABS10 BCJ12 BWZ18B ABLS3 IBL39 IBL49 LGL03 SBK9 RCSB05 FRX18 IV08 IV09 CBL23 NBK27B IBL91 IBL103 IBL68
12-Mar 15-Mar 17-Mar 23-Mar 27-Mar 31-Mar 02-Apr 03-Apr 10-Apr 12-Apr 14-Apr 30-Apr 18-May 01-Jun 02-Jun 08-Jun 29-Jun
ZAR Mil.
Sum of Issued Amount Sum of Outstanding AmountIssued Amount Outstanding Amount
Nedbank Auction (12 Feb. 2018): Looking to raise R2bn (with option to upsize to R2.5bn), Floaters across 3yr, 5yr, 7.5yr and 10yr tenors
Price Guidance: 3yr: 110-120bps5yr: 135-145bps7.5yr: 160-170bps10yr: 180-195bps
Auction Result: Book Size R6.154bn, Issuance R2,403bnNBK44: 3yr 857MM J+120NBK45: 5yr 372MM J+145NBK46: 7.5yr 398MM J+165NBK47: 10yr 776MM J+190
0
500
1000
1500
2000
2500
AD
CB
01
RD
FB02
NTC
16
MB
F05
4
BEE
R0
2
VK
E05
EPF0
09
IPL7
TPD
A0
3
EQS0
6
EQS0
7
MB
F04
5
IPF1
2
JDG
04
SHS2
8
SSA
05
EQS0
5
MB
P3
4
HIL
B03
VK
E06
REB
01
REB
02
EPF0
02
BSR
17
KA
P00
5
SHS2
3
CIG
04
08-Mar 11-Mar 22-Mar 27-Mar 28-Mar 30-Mar 05-Apr 09-Apr 13-Apr 15-Apr 16-Apr 25-Apr 29-Apr 02-May08-May 21-May 28-May 19-Jun 29-Jun 30-Jun
ZAR Mil.
Sum of Issued Amount Sum of Outstanding AmountIssued Amount Outstanding Amount
Netcare Auction (12 Feb. 2018): Looking to raise R700mln, Floaters across 3yr and 5yr tenors
Price Guidance: 3yr: 150-160bps5yr: 170-180bps
Auction Result: Book Size R1,935bn, Issuance R761mlnNTC22: 3yr 189MM J+155NTC23: 5yr 572MM J+175
Redefine Auction (7 March 2018): Looking to raise R600mln (with option to upsize to R750mln), Floaters across 3yr and 5yr tenors
Price Guidance: 3yr: 140-150bps5yr: 160-170bps
Auction Result: Book Size R1,896bn, Issuance R727mlnRDFB13: 3yr 299MM J+140RDFB14: 5yr 428MM J+160
Summary
R42,8bn of bonds issued are scheduled for redemption or call in the remainder of 1H18. About 20% has already been redeemed orrolled.
Redemptions are concentrated in financial (47%) and corporate (34%) notes.
First Rand has already issued about R5bn in new and tap notes this year
MBSA has R3,75bn maturing across three notes in March and April. The corporate has already raised R1bn in new notes this year through private placements.
DCM TRENDS | 23 MARCH 18 | PAGE 10
REDEMPTIONS – 1H18
State-Owned Enterprises
Source: JSE, Bloomberg, Nedbank CIB
Source: JSE, Bloomberg, Nedbank CIB
0
500
1000
1500
2000
2500
3000
3500
4000
4500
IDCP05 LBK19 DVF18 ES18 COJ04
14-Mar 23-Mar 30-Mar 20-Apr 05-Jun
ZAR Mil.
Sum of Issued Amount Sum of Outstanding AmountIssued Amount Outstanding Amount
Table 1: 1H18 2018 Scheduled Calls/Redemptions
Bond Code Issuer SectorIssued Amount
(Rm) Outstanding Amount
('Rm) % Outstanding
Amount Issue date Maturity Date
EPFC30 Emira Property Fund Ltd Corporate 182,00 0,00 0% 2017/02/22 2018/03/02
ADCB01 Adcorp Holdings Ltd Corporate 400,00 0,00 0% 2013/03/08 2018/03/08
RDFB02 Redefine Properties Ltd Corporate 614,00 614,00 100% 2013/03/11 2018/03/11
IBL66 Investec Bank Ltd Financial 125,00 125,00 100% 2015/03/12 2018/03/12
IDCP05 Industrial Development Corp of South Africa Ltd SOE 500,00 500,00 100% 2013/03/14 2018/03/14
IBL22 Investec Bank Ltd Financial 70,00 70,00 100% 2011/03/15 2018/03/15
ABS10 Absa Bank Ltd Financial 928,00 928,00 100% 2011/03/17 2018/03/17
ABFN07 Absa Bank Ltd Financial 1176,00 1047,00 89% 2011/03/17 2018/03/17
NTC16 Clindeb Investments Pty Ltd Corporate 600,00 600,00 100% 2013/03/22 2018/03/22
BCJ12 Bank of China Ltd/Johannesburg Financial 2200,00 2200,00 100% 2017/03/22 2018/03/23
LBK19 Land & Agricultural Development Bank of South Africa SOE 755,00 755,00 100% 2017/03/23 2018/03/23
BWZ18B Bank Windhoek Ltd Financial 180,00 180,00 100% 2015/03/27 2018/03/27
MBF054 Mercedes-Benz South Africa Pty Ltd Corporate 250,00 250,00 100% 2017/03/27 2018/03/27
BEER02 SABSA Holdings Pty Ltd Corporate 1000,00 1000,00 100% 2013/03/28 2018/03/28
VKE05 Vukile Property Fund Ltd Corporate 100,00 100,00 100% 2013/03/28 2018/03/28
DVF18 Development Bank of Southern Africa Ltd SOE 1295,00 1295,00 100% 2014/09/30 2018/03/30
EPF009 Emira Property Fund Ltd Corporate 60,00 60,00 100% 2016/09/30 2018/03/30
ABLS3 Residual Debt Services Ltd Financial 515,00 0,00 0% 2011/03/31 2018/03/31
Land Bank Auction (19 March 2018): Looking to raise R1.5bn (with option to upsize to R2bn), Floaters across the 1yr, 3yr and 5yr tenors
Price Guidance: 1yr: 95-110 bps3yr: 135-150bps5yr: 200-215 bps
Auction Result: Book size R3,252bn, Issuance R2,015bn LBK25: 1yr 500MM J+100bpsLBK26: 3yr 245MM J+149bpsLBK27: 5yr 1270MM J+215bps
DCM TRENDS | 23 MARCH 18 | PAGE 11
REDEMPTIONS – 1H18
Table 1: 1H18 2018 Scheduled Calls/Redemptions cont
Source: JSE, Bloomberg, Nedbank CIB
Bond Code Issuer Sector Issued Amount (Rm) Outstanding Amount
('Rm) % Outstanding Amount Issue date Maturity Date
IBL39 Investec Bank Ltd Financial 193,00 193,00 100% 2012/04/02 2018/04/02
IBL49 Investec Bank Ltd Financial 1169,00 1169,00 100% 2013/04/02 2018/04/02
LGL03 Liberty Group Ltd Financial 1000,00 1000,00 100% 2012/10/03 2018/04/03
TPDA03 Commissioner Street 5 RF Ltd Corporate 800,00 800,00 100% 2012/10/11 2018/04/05
IPL7 Imperial Group Pty Ltd Corporate 750,00 750,00 100% 2013/04/05 2018/04/05
EQS07 enX Corp Ltd Corporate 106,00 106,00 100% 2013/04/09 2018/04/09
EQS06 enX Corp Ltd Corporate 340,00 340,00 100% 2013/04/09 2018/04/09
EQS06 enX Corp Ltd Corporate 340,00 340,00 100% 2013/04/09 2018/04/09
SBK9 Standard Bank of South Africa Ltd/The Financial 1500,00 1500,00 100% 2006/04/10 2018/04/10
RCSB05 BNP Paribas Personal Finance South Africa Ltd Financial 170,00 170,00 100% 2013/04/12 2018/04/12
MBF045 Mercedes-Benz South Africa Pty Ltd Corporate 1500,00 1500,00 100% 2015/04/13 2018/04/13
FRX18 FirstRand Bank Ltd Financial 1581,00 1551,00 98% 2010/04/14 2018/04/14
JDG04 JD Group Ltd/South Africa Corporate 300,00 0,00 0% 2013/04/15 2018/04/15
IPF12 Investec Property Fund Ltd Corporate 100,00 0,00 0% 2015/04/15 2018/04/15
SHS28 Steinhoff Services Ltd Corporate 300,00 0,00 0% 2015/11/13 2018/04/15
SSA05 Sappi Southern Africa Pty Ltd Corporate 500,00 500,00 100% 2013/04/16 2018/04/16
ES18 Eskom Holdings SOC Ltd SOE 4000,00 2338,84 58% 2009/04/20 2018/04/20
EQS05 enX Corp Ltd Corporate 900,00 600,00 67% 2012/04/25 2018/04/25
MBP34 Mercedes-Benz South Africa Pty Ltd Corporate 2000,00 2000,00 100% 2015/04/29 2018/04/29
IV08 Investec Bank Ltd Financial 200,00 200,00 100% 2008/04/30 2018/04/30
IV09 Investec Bank Ltd Financial 200,00 200,00 100% 2008/04/30 2018/04/30
HILB03 Hyprop Investments Ltd Corporate 450,00 450,00 100% 2013/05/02 2018/05/02
VKE06 Vukile Property Fund Ltd Corporate 380,00 380,00 100% 2015/05/08 2018/05/08
CBL23 Capitec Bank Ltd Financial 500,00 500,00 100% 2015/05/18 2018/05/18
REB01 Rebosis Property Fund Ltd Corporate 230,00 230,00 100% 2015/05/21 2018/05/21
REB02 Rebosis Property Fund Ltd Corporate 100,00 100,00 100% 2016/07/22 2018/05/21
EPF002 Emira Property Fund Ltd Corporate 300,00 300,00 100% 2014/05/30 2018/05/28
NBK27B Nedbank Ltd Financial 1427,00 1427,00 100% 2015/06/01 2018/06/01
IBL91 Investec Bank Ltd Financial 100,00 100,00 100% 2016/06/02 2018/06/02
COJ04 City of Johannesburg South Africa Municipal 1733,00 1733,00 100% 2006/06/05 2018/06/05
IBL103 Investec Bank Ltd Financial 150,00 150,00 100% 2017/06/09 2018/06/08
BSR17 Basil Read Ltd Corporate 50,00 0,00 0% 2015/06/19 2018/06/19
SHS23 Steinhoff Services Ltd Corporate 400,00 0,00 0% 2015/06/29 2018/06/29
IBL68 Investec Bank Ltd Financial 130,00 130,00 100% 2015/06/29 2018/06/29
KAP005 KAP Industrial Holdings Ltd Corporate 240,00 240,00 100% 2016/06/29 2018/06/29
CIG04 Consolidated Infrastructure Group Ltd Corporate 134,00 134,00 100% 2014/06/30 2018/06/30
DCM TRENDS | 23 MARCH 18 | PAGE 12
SPREAD DEVELOPMENT
February/March 2018 Spread Development
Source: JSE, Bloomberg, Nedbank CIB
Standard Bank Group’s Tier 2 bond (SBT201) spread of 314bps cleared at the top-end of price guidance (295-315bps). We think this follows from the last price point, which was FirstRand’s R2,75bn issue at 315bps in September 2017. We note that these bonds were issued in different market windows. The FirstRand note was issued prior to the 2017 MTBPS, while the Standard Bank note was issued just before the National Budget Speech 2018.
Nedbank set a new price point for its Tier 2 notes, with its spread clearing towards the lower-end of price guidance (275-350bps) at 305bps. Both Standard Bank and Nedbank issued at the Holdco-level. Investors seem comfortable with the structural subordination (given the strong bid appetite), but perhaps the high demand for these assets is keeping the spread differential between the Opco and Holdco sub-debt issuances at nil. The trajectory for sub-debt is for further spread tightening, if the issuance window is timed correctly, with perhaps a psychological barrier at J+300bps for Tier 2 notes.
Netcare’s NTC22 and NTC23 auction finished 5bps below the previous clearing levels of similar bonds issued in mid-2017 (NTC20, 3yr, J+160 ; NTC21, 5yr, J+180).
0
100
200
300
400
500
600
0
0.5
1
1.5
2
2.5
3
3.5
AA+ N/R AA+ AAA AA+ A+ AA+ AA+ AA+ A+ AA+ AA+ A AAA AA+ A+ AAA AA+ BBB+ BB+ AA+ AAA AAA AA+ AA+ AA- AAA BBB
SBS37 CGR38 FRJ22 MBP039NBK44B NTC22 SBS47 IBL110 RDFB13 HPF11 BAW29 FRJ23 IPF24 MBP040NBK45B NTC23 GRT24GRDFB14 NGL04 INLV05 NBK46BGRT25G ES33 FRX32 NBK47BNRA028GRT26G SBT201
Sr Unsecured Sr Unsecured Secured Sr Unsecured Subordinated . Sr Unsecured Sr Unsecured Subordinated
1- 3Years
3-5 Years 5-7 Years 7-10 Years 10-20 Years
Spre
ad (
bp
s)
Vo
lum
e ('
Rb
n)
Bonds (Vanilla) - Amount Issued ('Rbn) Bonds (Vanilla) - Spread at issue (bps)
Jr Subordinated
DCM TRENDS | 23 MARCH 18 | PAGE 13
0
50
100
150
200
250
300
350
400
450
500
0
0.2
0.4
0.6
0.8
1
1.2
FBJ20ZFNB
NamibiaLtd
BPPF02BNP
ParibasPersonal
Finance SA
CBL27Capitec
IBL100Investec
ABFN20Absa
SBS54SBSA
KST01 PSGKonsult
Treasury
IBL104Investec
IBL106Investec
BPPF04BNP
ParibasPersonal
Finance SA
SBS59SBSA
BCJ15 Bankof China
GBL03Grindrod
Bank
BCJ16 Bankof China
LHL27LetshegoHoldings
NBK44BNedbank
IBL110Investec
AA- AAA A AA- AA- AA- A- AA- AA AAA AA+ AAA BBB+ AAA A- AA+ AA+
20-Mar-17 22-Mar-17 12-May-17 24-May-17 30-May-17 12-Jun-17 12-Jul-17 17-Jul-17 04-Aug-17 15-Sep-17 09-Oct-17 09-Nov-17 16-Nov-17 08-Dec-17 13-Dec-17 15-Feb-18 07-Mar-18
Spre
ad
Vo
lum
e
Amount Issued ('Rbn) Spread at issue (bps)
Mixed rate note
SPREAD DEVELOPMENT
3-Year New Issuances – Financials
Source: JSE, Bloomberg, Nedbank CIB
3-Year New Issuances – Corporates and State-Owned Enterprises
Source: JSE, Bloomberg, Nedbank CIB
Secured Not guaranteed
Sr. UnsecuredNot guaranteed
Sr. UnsecuredGuaranteed
Sr. UnsecuredGuaranteedSr. Unsecured
Guaranteed
0
50
100
150
200
250
300
350
400
450
0
0.5
1
1.5
2
2.5
GR
T18
Gro
wth
po
int
IPF2
0 In
vest
ec P
rop
erty
Fu
nd
TFS1
44 T
FSA
LBK
17
Lan
d B
ank
RD
FB10
Red
efin
e
MB
F05
5 M
BSA
DV
F20B
DB
SA
SHS3
0 St
ein
ho
ff
MB
P03
6 M
BSA
VK
E09
Vu
kile
Pro
per
ty F
un
d
BA
W2
5 B
arlo
wo
rld
KA
P00
9 K
AP
MB
P03
7 M
BSA
EPF0
11
Emir
a
PM
M38
Pre
miu
m P
rop
erti
es
BID
07 B
idve
stco
SHS3
2 St
ein
ho
ff
MTN
06 M
TN
CG
R3
2 C
algr
o
NTC
20
Net
care
APF
05 A
ccel
erat
e P
rop
erty
Fu
nd
MB
F05
7 M
BSA
DV
F20C
DB
SA
TL22
Tel
kom
LBK
22
Lan
d B
ank
KA
P01
0 K
AP
CG
R3
3 C
algr
o
WH
L01
Wo
olw
ort
hs
Ho
ldin
gs
MTN
08 M
TN
TFS1
47 T
FSA
DV
F20D
DB
SA
EPF0
12
Emir
a
TFS1
51 T
FSA
CG
R3
8 C
algr
o
NTC
22
Net
care
MB
P03
9 M
BSA
RD
FB13
Red
efin
e
AAA A AAA AA+ AA AAA AA+ AA- AAA AA+ AA- A+ AAA A A AA+ AA+ AA- N/R A+ AA- AAA AA+ AA+ A+ N/R A+ AA- AAA AA+ A AAA N/R A+ AAA AA+
13-Mar-
17
17-Mar-
17
20-Mar-
17
22-Mar-
17
27-Mar-17 28-Mar-
17
05-Apr-17
11-Apr-17
08-May-
17
09-May-
17
24-May-
17
26-May-
17
12-Jun-17
14-Jun-17
30-Jun-17
10-Jul-17
13-Jul-17
21-Jul-17
27-Jul-17
24-Aug-17
28-Aug-17
29-Aug-17
04-Sep-17 15-Sep-17
22-Sep-17
10-Oct-17
11-Oct-17
12-Oct-17
23-Oct-17
06-Nov-
17
30-Nov-
17
13-Feb-18
15-Feb-18
23-Feb-18
12-Mar-
18
Spre
ad
Vo
lum
e
Amount Issued ('Rbn) Spread at issue (bps)
Secured
Secured
NOTE:# Notes are Senior Unsecured unless stated otherwise## Spreads are floating (above 3-month JIBAR), Fixed rates are represented comparably as swap spreads
NOTE:# Notes are Senior Unsecured unless stated otherwise## Spreads are floating (above 3-month JIBAR), Fixed rates are represented comparably as swap spreads
DCM TRENDS | 23 MARCH 18 | PAGE 14
0
100
200
300
400
500
600
0
0.5
1
1.5
2
2.5
3
3.5
FRJ22FirstRand
NGL02Nedbank
Group
FBJ22ZFNB
NamibiaLtd
SBT101Standard
BankGroup
IBL101Investec
IBL102Investec
BGL16Barclays
AfricaGroup
ABFN21Absa
SBS55SBSA
SBS56SBSA
NGLT1ANedbank
Group
BGT01Barclays
AfricaGroup
SBT102Standard
BankGroup
FRS171FirstRand
DSY01Discovery
SBS60SBSA
FRJ23FirstRand
SBT201Standard
BankGroup
NBK45BNedbank
INLV05Investec
NGL04Nedbank
Group
AA A- AA- BBB AA- BBB AA- AA- B+ BBB- BB- AA+ AA- AA+ AA+ BBB AA+ BB+ BBB+
07-Mar-17
14-Mar-17
20-Mar-17
30-Mar-17
24-May-17 30-May-17
12-Jun-17 30-Jun-1711-Sep-1721-Sep-1716-Oct-17 21-Nov-17
18-Jan-18 31-Jan-18 12-Feb-1815-Feb-18 15-Mar-18
19-Mar-18
Spre
ad
Vo
lum
e
Amount Issued ('Rbn) Spread at issue (bps)
SPREAD DEVELOPMENT
5-Year New Issuances – Financials
Source: JSE, Bloomberg, Nedbank CIB
5-Year New Issuances – Corporates and State-Owned Enterprises
Source: JSE, Bloomberg, Nedbank CIB
Jr. Subordinated
Subordinated
Jr. Subordinated
0
50
100
150
200
250
300
350
0
0.5
1
1.5
2
2.5
GR
T19
Gro
wth
po
int
IPF2
1 In
vest
ec P
rop
erty
Fu
nd
TFS1
45 T
FSA
LBK
18
Lan
d B
ank
RD
FB11
Red
efin
e
DV
F22
DB
SA
VK
E10
Vu
kile
Pro
per
ty F
un
d
BA
W2
8 B
arlo
wo
rld
LBK
20
Lan
d B
ank
IPF2
2 In
vest
ec P
rop
erty
Fu
nd
BID
08 B
idve
stco
SHS3
3 St
ein
ho
ff
MTN
07 M
TN
NTC
21
Net
care
EQS1
0 en
X
APF
06 A
ccel
erat
e P
rop
erty
Fu
nd
DV
F22B
DB
SA
LBK
23
Lan
d B
ank
TL23
Tel
kom
TL24
Tel
kom
MTN
09 M
TN
TFS1
48 T
FSA
RES
40
Res
ilien
t
GR
T22
Gro
wth
po
int
DV
F22C
DB
SA
KA
P11
KA
P
MB
P03
8 M
BSA
SHS3
4 St
ein
ho
ff
FIFB
14 F
ort
ress
FIFB
15 F
ort
ress
RD
FB12
Red
efin
e
KA
P01
2 K
AP
RES
41
Res
ilien
t
IDC
P07
IDC
IPF2
4 In
vest
ec P
rop
erty
Fu
nd
NTC
23
Net
care
HPF
11
HPF
BA
W2
9 B
arlo
wo
rld
MB
P04
0 M
BSA
GR
T24
G G
row
thp
oin
t
RD
FB14
Red
efin
e
AAA A AAA AA+ AA AA+ AA+ AA- AA+ A AA+ AA+ AA- A+ BBB AA- AA+ AA+ AA- AAA AA- AAA AA+ A+ AAA B- AA AA AA+ A+ AA- AA+ A A+ A+ AA+ AAA AAA AA+
13-Mar-
17
17-Mar-
17
20-Mar-
17
22-Mar-
17
27-Mar-
17
28-Mar-
17
08-May-
17
06-Jun-17
08-Jun-17
14-Jun-17
30-Jun-17
10-Jul-17
13-Jul-17
27-Jul-17
28-Jul-17
24-Aug-17
29-Aug-17
04-Sep-17 11-Oct-17
12-Oct-17
13-Oct-17
16-Oct-17
23-Oct-17
24-Oct-17
02-Nov-
17
03-Nov-
17
07-Nov-
17
20-Nov-
17
27-Nov-
17
30-Nov-17 15-Dec-17
05-Feb-18
15-Feb-18
19-Feb-18
22-Feb-18
23-Feb-18
09-Mar-
18
12-Mar-
18
Spre
ad
Vo
lum
e
Amount Issued ('Rbn) Spread at issue (bps)
Secured
Secured
Secured
NOTE:# Notes are Senior Unsecured unless stated otherwise## Spreads are floating (above 3-month JIBAR), Fixed rates are represented comparably as swap spreads
Jr. Subordinated
Subordinated
Jr. Subordinated
NOTE:# Notes are Senior Unsecured unless stated otherwise## Spreads are floating (above 3-month JIBAR), Fixed rates are represented comparably as swap spreads
DCM TRENDS | 23 MARCH 18 | PAGE 15
SPREAD DEVELOPMENT
≥7-Year New Issuances – Financials
Source: JSE, Bloomberg, Nedbank CIB
≥7-Year New Issuances – Corporates and State-Owned Enterprises
Source: JSE, Bloomberg, Nedbank CIB
0
50
100
150
200
250
300
350
400
450
0
0.5
1
1.5
2
2.5
3
AB
FN2
2 A
bsa
SBS5
7 S
BSA
BG
L17
Bar
clay
s A
fric
a G
rou
p
LGL0
9 L
iber
ty G
rou
p
BG
L19
Bar
clay
s A
fric
a G
rou
p
FRS1
72
Firs
tRan
d
AB
FN2
4 A
bsa
AB
FN2
5 A
bsa
DSY
02 D
isco
very
DSY
03 D
isco
very
NB
K46B
Ned
ban
k
FRX
27 F
irst
Ran
d
FRX
32 F
irst
Ran
d
BG
L15
Bar
clay
s A
fric
a G
rou
p
SBS5
2 S
BSA
SBS5
3 S
BSA
AB
FN2
3 A
bsa
NG
L03
Ned
ban
k G
rou
p
SBS5
8 S
BSA
IV04
6 In
vest
ec
SNT0
4 Sa
nta
m
FRB
I29
Fir
stR
and
FRB
23
Firs
tRan
d
BG
L18
Bar
clay
s A
fric
a G
rou
p
AB
FN2
6 A
bsa
MM
IG06
MM
I Gro
up
OM
I01
Old
Mu
tual
Insu
re
MM
IG06
MM
I Gro
up
NB
K47B
Ned
ban
k
AA- AA- BBB AA BBB AA+ AA AA- AA+ AA A- A A AA- BBB AA- AA- AA- AA- AA BBB AA AA A+ AA AA+
30-May-
17
12-Jun-17
14-Aug-17
28-Aug-17
29-Sep-17
16-Oct-17
17-Oct-17 21-Nov-17 15-Feb-18
07-Mar-17 16-Mar-
17
25-Apr-17
02-May-
17
25-May-17 12-Jun-17
21-Jun-17
27-Jun-17
27-Jul-17
20-Sep-17
29-Sep-17
17-Oct-17
19-Oct-17
20-Nov-
17
04-Dec-17
15-Feb-18
7-10 Years 10-20 Years
Spre
ad
Vo
lum
e
Amount Issued ('Rbn) Spread at issue (bps)
Subordinated Unsecured
Subordinated Unsecured
Subordinated Unsecured
Subordinated Unsecured
NOTE:# Notes are Senior Unsecured unless stated otherwise## Spreads are floating (above 3-month JIBAR), Fixed rates are represented comparably as swap spreads
0
50
100
150
200
250
0
0.2
0.4
0.6
0.8
1
1.2
GRT20Growthpoint
GRT21Growthpoint
TL25 Telkom LBK24 LandBank
MTN10 MTN GRT23Growthpoint
DVF24 DBSA TL26 Telkom GRT25GGrowthpoint
EMM07 EMM CCT04 City ofCape Town
EMM07PEMM
GRT26GGrowthpoint
AAA AA+ AA+ AA- AAA AA+ AA+ AAA AAA AAA AAA
23-Mar-17 04-Sep-17 10-Oct-17 11-Oct-17 16-Oct-17 23-Oct-17 24-Nov-17 09-Mar-18 10-Jul-17 17-Jul-17 09-Mar-18
7-10 Years 10-20 Years
Spre
ad
Vo
lum
e
Amount Issued ('Rbn) Spread at issue (bps)
DCM TRENDS | 23 MARCH 18 | PAGE 16
BOND CURVES
Corporate Relative Value Yield Curve
Source: Bloomberg
Financials Relative Value Yield Curve
Source: Bloomberg
USD Billions
USD Billions
DCM TRENDS | 23 MARCH 18 | PAGE 17
BOND CURVES
State-Owned Enterprises Relative Value Yield Curve
Source: Bloomberg
Consolidated Relative Value Yield Curve (All Bonds Issued)
Source: Bloomberg
USD Billions
USD Billions
DCM TRENDS | 23 MARCH 18 | PAGE 18
RATINGS DISTRIBUTION
Issuances LTM – Clustering of issuances in the “AA” band
Source: JSE, Bloomberg, Nedbank CIB
Issuers/Notes Standardised Rating Distribution
Source: JSE, Bloomberg, Nedbank CIB
0
5
10
15
20
25
30
AAA
AA+
AA
AA-
A+
A
A-
BBB+
BBB
BBB-
BB-
B+
B-
N/R
Bonds (Vanilla)
Amount Issued ('Rbn)
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB- B+ B B- NR
Nu
mb
er o
f Is
suer
s
Standardised Rating
Calgro is the only issuer in the market that is not rated
DCM TRENDS | 23 MARCH 18 | PAGE 19
RATINGS DISTRIBUTION
S&P Ratings Distribution
Source: JSE, Bloomberg, Nedbank CIB
Moody’s Ratings Distribution
Source: JSE, Bloomberg, Nedbank CIB
0
1
2
3
4
5
6
Ban
k
Insu
ran
ce
Man
ufa
ctu
rin
g &
Ind
ust
rial
Mu
nic
ipal
ity
NB
FI
Pro
pe
rty
Ban
k
Bu
sin
ess
Serv
ices DFI
Min
ing
Mu
nic
ipal
ity
Pro
pe
rty
Tele
com
s, M
edia
& IC
T
Tran
spo
rt &
Lo
gist
ics
Ban
k
Insu
ran
ce
Ban
k
Insu
ran
ce
Tele
com
s, M
edia
& IC
T
Tran
spo
rt &
Lo
gist
ics
Tran
spo
rt &
Lo
gist
ics
Ban
k
Mu
nic
ipal
ity
Ban
k
Po
wer
Po
wer
Po
wer
NB
FI
AAA AA+ AA AA- A+ BBB+ BBB CC
Nu
mb
er
of
Issu
ers
/No
tes
rate
d
Guaranteed Senior Unsecured Guaranteed Subordinated Hybrid/Junior Subordinated/Prefs. Lower Tier II Subordinated Senior Unsecured
Senior Unsecured (IFS) Senior Unsecured/RCF Subordinated Tier II Subordinated Upper Tier II Subordinated
0
1
2
3
4
5
6
7
Ban
k
Min
ing
Insu
ran
ce
Sove
reig
n
Tran
spo
rt &
Lo
gist
ics
Wat
er
Wat
er
Min
ing
Tele
com
s, M
edia
& IC
T
Tran
spo
rt &
Lo
gist
ics
Ban
k
Insu
ran
ce
Min
ing
NB
FI
Ret
ail
Ban
k
Insu
ran
ce
Ban
k
Min
ing
Ban
k
Man
ufa
ctu
rin
g &
Ind
ust
rial
Min
ing
Po
wer
AAA AA+ AA AA- A+ A BBB+ BBB B
Nu
mb
er o
f Is
suer
s/N
ote
s ra
ted
Guaranteed Senior Unsecured Hybrid/Junior Subordinated/Prefs. Lower Tier II Subordinated Senior Secured
Senior Unsecured Senior Unsecured (IFS) Senior Unsecured/RCF Subordinated
Tier II Subordinated Tier II Subordinated (deferrable) Tier II Subordinated (non-deferrable) Upper Tier II Subordinated
We expect S&P to complete its recalibration of its South African national scale in the next couple of months. Initial indications are that the impact will be limited, and would likely result in marginal upgrades, particularly around the current “AA-” band of ratings.
Our expectation is that Moody’s will affirm the Sovereign’s ratings at the “Baa3” level, but revise the outlook to “Negative” from “Watch Neg”. This should mean that many of the ratings that are either linked to the sovereign or are capped by the sovereign will also go through outlook changes. If the outcome is a downgrade, then we expect a recalibration of the national scale, with some national scale rating transitions (although relative rankings between credits would be preserved, despite the new level of the rating symbols).
DCM TRENDS | 23 MARCH 18 | PAGE 20
RATINGS DISTRIBUTION
GCR Ratings Distribution
Source: JSE, Bloomberg, Nedbank CIB
Fitch Ratings Distribution
Source: JSE, Bloomberg, Nedbank CIB
0
1
2
3
4
5
6
7
8
9
Insu
ran
ce
Man
ufa
ctu
rin
g &
Ind
ust
rial
Tran
spo
rt &
Lo
gist
ics
DFI
Insu
ran
ce
Po
wer
Wat
er
Wat
er
Ban
k
Insu
ran
ce
Tele
com
s, M
edia
& IC
T
Tran
spo
rt &
Lo
gist
ics
Ban
k
Ban
k
Po
wer
AAA AA+ AA AA- A
Nu
mb
er o
f Is
suer
s/N
ote
s ra
ted
Guaranteed Senior Unsecured Hybrid/Junior Subordinated/Prefs. Senior Unsecured Senior Unsecured (IFS) Senior Unsecured/RCF
Term Loan Term Loan/Bond Tier II Subordinated Upper Tier II Subordinated
0
1
2
3
4
5
Insu
ran
ce
Ban
k
DFI
Pro
pe
rty
Ban
k
Mu
nic
ipal
ity
Pro
pe
rty
Ban
k
Insu
ran
ce
Pro
pe
rty
Ban
k
DFI
Hea
lth
care
Insu
ran
ce
Man
ufa
ctu
rin
g &
Ind
ust
rial
NB
FI
Pro
pe
rty
Bu
sin
ess
Serv
ices
Edu
cati
on
Man
ufa
ctu
rin
g &
Ind
ust
rial
Pro
pe
rty
Ret
ail
Tele
com
s, M
edia
& IC
T
Ban
k
Co
nst
ruct
ion
Man
ufa
ctu
rin
g &
Ind
ust
rial
Min
ing
NB
FI
Pro
pe
rty
Ban
k
Insu
ran
ce
NB
FI
Pro
pe
rty
Ret
ail
Co
nst
ruct
ion
Edu
cati
on
Insu
ran
ce
NB
FI
Pro
pe
rty
Tran
spo
rt &
Lo
gist
ics
Bu
sin
ess
Serv
ices
Edu
cati
on
Tele
com
s, M
edia
& IC
T
NB
FI
AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB- B
Nu
mb
er o
f Is
suer
s/N
ote
s ra
ted
Senior Secured Senior Unsecured Senior Unsecured (CPA) Senior Unsecured (IFS) Tier II Subordinated Tier II Subordinated
DCM TRENDS | 23 MARCH 18 | PAGE 21
CONTACTS
Analysts
Nthulleng MphahleleAnalystTel : +27 11 294 7032 NthullengM@Nedbank.co.za
Jones GondoSenior Credit Research Analyst Tel : +27 11 294 4484JonesG@Nedbank.co.za
Links To Recent Publications
• Fixed Income Credit Insights: SA Sovereign Credit Rating Preview – Moody’s, Published 20 March 2018• Fixed Income Credit Insights: Pre-Budget Credit Insight, Published 21 February 2018• Fixed Income Credit Insights: Market Update – Eskom Holdings SOC Ltd, Published 18 January 2018• Fixed Income Credit Insights: Market Update – Steinhoff, Published 16 January 2018
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