South African issues have tapped the international high-yield market after a two year absence, spurring interest in the country’s fledgling local market. But investors want local market covenants to be less complex and offer more protection than New York-law precedents.
“There has been significant attention over whether there is a potential for a local South African high-yield market to develop,” said Mark Bergman, co-head of Paul Weiss Rifkind Wharton & Garrison’s capital markets practice.
This interest follows last month’s offshore issues by Edcon and Foodcorp. It also comes as the first South African high-yield issues (launched in the LBO boom) approach their seven-year maturities.
Deals in the South African market started in 2005, which means that issuers need to be thinking about refinancing, and have the benefit of being...