Written by Rene Vollgraaff |From Businessweek

South Africa is returning to international debt markets for the first time in 10 months, defying a credit-rating downgrade to offer bonds in dollars and euros amid a rally in emerging-market assets.

Africa’s second-biggest economy plans to sell dollar debt due 2044 and euro notes due 2026, according to a filing today with the Securities and Exchange Commission. Citigroup Inc. (C:US), Barclays Plc and Johannesburg-based Rand Merchant Bank are arranging the sale, according to the filing. The government plans to raise the equivalent of $1.5 billion, the National Treasury said on July 1.

South Africa is set join Kenya, Zambia, Senegal and Ivory Coast as countries from the continent tap demand for developing-nation assets that has pushed yields lower. The European Central Bank has maintained stimulus, while Federal Reserve Chair Janet Yellen told lawmakers yesterday that a “high degree of monetary policy accommodation remains appropriate” to combat weakness in the U.S. economy.

“It’s a good time for South Africa to come to market,” Jonathan Meyerson, who helps oversee the equivalent of $1.7 billion in fixed-income investments at Cadiz Asset Management, said by phone from Cape Town. “It’s a much better time for the issuer than investors. It’s a seller’s market.”

It will be South Africa’s first sale of euro-denominated bonds since 2006, according to data compiled by Bloomberg and the first dollar sale since September. South African dollar debt returned 7.1 percent this year, compared with 8.9 percent for emerging-market debt, according to Bloomberg indexes. The rand gained 0.4 percent to 10.6635 per dollar by 3:35 p.m. in Johannesburg.

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