Strong issuance in South Africa’s debt capital market continued in the fourth quarter of 2025, with about R50-billion of gross term issuance recorded, amid strong demand and spread compression, slightly behind the R53-billion issued in the prior quarter, says investment management company Futuregrowth in its latest quarterly listed credit market review.

In line with the trend over the year, banks and financial services dominated the quarter’s issuance at R22-billion, followed by corporates at R13-billion, State-owned enterprises (SOEs) at R12-billion and securitisations at R4-billion.

For the third consecutive year, municipalities remained absent from the debt capital market.

The trend of auction oversubscription and spread compression continued during the quarter owing to a continuation of factors, including strong and growing demand for primary market issuance, the supply side not growing sufficiently to meet this demand, less attractive pickup offered by alternatives such as government floaters, banks being aggressive bidders in certain corporate auctions and the improving fundamental credit strength of issuers.

Among SOEs, Transnet’s November auction of government-guaranteed paper was well supported and attracted record volumes, with R42-billion in bid volume across 44 bidders, and was more than eight times oversubscribed, Futuregrowth reports.

Spreads cleared about 30 to 40 basis points below price guidance.

Transnet raised R5-billion across a five-year floating rate note that cleared at 148 basis points over a three-month Johannesburg Interbank Average Rate (JIBAR); an eight-year floating rate note that cleared at 168 basis points over a three-month JIBAR; and a ten-year floating rate note that cleared at 178 basis points over a three-month JIBAR.

It also raised the funding from a ten-year fixed rate note, which cleared at 105 basis points.

Since Transnet’s R15-billion private placement of government-guaranteed debt in August, the implied spread compression for the eight-year floating rate note in the November auction was about 63 basis points, Futuregrowth says.

Meanwhile, development finance institutions the Development Bank of Southern Africa and the Industrial Development Corporation raised R6.9-billion of debt through a mix of auctions and private placements. As a reflection of demand, the notes issued via auction were on average three times oversubscribed.