SA’s pledge not to let Eskom Holdings fail is enticing yield-starved investors to the company’s dollar debt.

Bondholders from New York to Seoul say they’re happy to hold on to the power company’s securities — and in some cases add to their holdings — because of their extra return relative to the country’s sovereign debt. The government’s assurance that it won’t let the company default, effectively guaranteeing the debt, allows investors to play that spread without too much risk even though Eskom isn’t generating enough cash to service its own liabilities.

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