Liberty debt costs jump to record as SA risk rises
LIBERTY is paying more than ever to sell fixed-rate debt as South African life insurers struggle to increase profit in an economy heading for its slowest expansion since the 2009 recession. Liberty issued R400m of unsecured bonds due in October 2022 this month that will pay a coupon of 10.2% twice a year, more than 1 percentage point higher than 7-year securities the Johannesburg-based insurer sold in 2013, according to data compiled by Bloomberg. The spread of Liberty’s R1bn notes maturing in August 2020 reached a seven-month high against similar-dated government debt on Monday. President Jacob Zuma’s administration is struggling to reignite growth forecast by National Treasury to reach 1% this year. S&P Global Ratings has urged the government to quell investor uncertainty and end political interference that’s weakening state institutions and threatening the country’s investment-grade status. Volatile equity markets, interest rates at a six-year high and consumers battling unemploy...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.