Treasury calls for proposals on innovative foreign currency financing solutions for 2025/26

1. Background

The Republic of South Africa, through the National Treasury, is seeking to supplement its foreign currency borrowing programme for the 2025/26 fiscal year by exploring innovative and cost-effective financing mechanisms and hereby invites eligible market participants to submit proposals for such solutions.

2. Objective

This funding initiative aims to:

• Diversify the sovereign’s hard currency funding toolkit beyond a traditional Eurobond

• Reduce execution risk and minimise the all-in cost of funds

• Maintain flexibility for future liability management actions aligned with evolving market conditions

3. Target size and currency

Proposals should raise, on a stand-alone or combined basis, a minimum amount of US$ 500 million. If funding is offered in another hard currency, the counterparty must commit to swapping the proceeds into US dollars at closing.

4. Eligible counterparties

Responses are invited from:

• Primary dealers in South African government securities

• Internationally active arranging banks

• Multilateral institutions

• Institutional investors

• Other regulated financial entities with capacity to fund at scale, either directly or through an arranging bank

5. Acceptable instruments and structures

The National Treasury will consider a range of instruments, including but not limited to:

• Bilateral term loans

• Private placements of floating rate notes

• Repurchase agreements against sovereign collateral

• Cross-currency or total return swaps with funding legs in US dollars

• Other structured note formats

Proposals incorporating environmental, social, and governance (ESG) or sustainability-linked features are encouraged, particularly if aligned with the National Treasury’s ESG framework.

6. Evaluation criteria

Proposals will be assessed on the basis of:

• Overall cost of funds (spread over the Secured Overnight Financing Rate (SOFR) or equivalent benchmark)

• Speed and certainty of execution

• Compatibility with the sovereign’s maturity profile and debt service peaks

• Operational simplicity

• Resilience to market shocks, including currency volatility and rate spikes

7. Submission requirements

Please submit a PDF term sheet including:

• Proposed amount, tenor, pricing and indicative spread

• Settlement date

• Key covenants or conditions precedent

• Collateral requirements (if any)

• Governing law and documentation platform

• Any relevant ESG characteristics

8. Indicative timeline

• Proposal deadline: Wednesday, 6 August 2025, 12:00 South African Standard Time (SAST)

• Evaluation window: Thursday, 7 August 2025 – Friday, 29 August 2025

9. Compliance and confidentiality

This request contains no material, non-public information and may be shared with public-side desks. All proposals and follow-up discussions will be treated confidentially and will comply with all applicable South African public finance regulations.

10. Submission channel and contacts:

Please email proposals to: debtissuanceandmanagement@treasury.gov.za

Enquiries:
Terry Bomela Msomi
Director: Treasury Funding
Tel: 012 315 5135

Wanga Cibi
Chief Director: Liability Management
Tel: 012 315 5132

Disclaimer: this document is an invitation for proposals. It does not constitute an offer or a commitment to borrow. The Government of the Republic of South Africa reserves the right, at its sole discretion, to accept or reject any proposal, to negotiate with any respondent, or to terminate the process at any stage without incurring liability.

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