February 20, 2019 / 1:17 PM / 6 months ago

S.Africa Eskom dollar bonds broadly gain after budget

LONDON, Feb 20 (Reuters) - Dollar-denominated bonds issued by South Africa’s Eskom broadly gained on Wednesday after the government announced in its budget that the heavily-indebted utility would receive a 69 billion rand ($4.88 billion) bailout over three years.

The 2023 and the 2025 issues both rose 1.415 cents to trade at just over 99 cents in the dollar - their highest level in nearly two weeks, according to Tradeweb data.

“It is better than what was expected for Eskom in terms of direct cash,” said Kaan Nazli, senior economist emerging markets debt at Neuberger Berman. “At the end is 70 percent of what the company has asked for and I think the market expected less than that.”

South Africa’s sovereign dollar-denominated debt initially fell on the budget announcement, but retraced most losses.

Reporting by Karin Strohecker; Editing by Tom Arnold

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