Bond sales at their lowest level

SOUTH African corporate bond sales slid to the lowest level since 2009 as African Bank Investment’s failure drove up borrowing costs and spurred companies to cancel debt plans. Issuance this year fell 39 percent to $4.8 billion (R55.5bn), according to data compiled by Bloomberg. Global corporate bond sales increased 8.5 percent to a record $4.08 trillion as companies lock in borrowing costs on the likelihood the Federal Reserve would raise interest rates next year. “The significant slowdown has taken place after African Bank collapsed,” Jonathan Myerson, the head of fixed income at Cadiz Asset Management, which oversees the equivalent of $1.7bn, said on December 18. “Investors became a bit more concerned about investing in corporate bonds at a time where credit spreads look to be a little on the expensive side.” – Bloomberg