SBSA Ltd Pioneers First ZARONIA-Linked Bond Issuance
The Standard Bank of South Africa Limited (“SBSA”) is proud to announce the first issuance of a listed bond in South Africa using the newly established South African Rand Overnight Index Average (“ZARONIA”) floating interest rate benchmark.
This landmark event positions Standard Bank at the forefront of the financial sector's transition to more robust and transparent interest rate benchmarks.
ZARONIA, the designated key successor rate for the Johannesburg Interbank Agreed Rate (JIBAR), is being phased in to address potential weaknesses in the current floating rate setting mechanism. The rate has been in place since 1999 and is based on daily interest rate quotations provided by South Africa’s largest banks. ZARONIA will replace JIBAR, being based on underlying transactions and thus reducing the possibility of rates not reflecting market trading levels.
The transition project, managed by the South African Reserve Bank's Market Practitioners Group (MPG), aims to shift all JIBAR-linked transactions to alternative reference rates. This initiative mirrors similar moves in the US and UK to replace benchmarks like LIBOR with more reliable standards.
With the JSE and Strate having confirmed their readiness to process and list ZARONIA-linked bonds on 19 May 2025, SBSA successfully issued a 100m 3-year bond, priced at ZARONIA plus a margin of 102bps on 21 May 2025.
Zaid Moola, Head of Global Markets at Standard Bank, added: “As the largest markets franchise in South Africa, Standard Bank is delighted to play a leading role in moving the South African interest rate market into a new era. This new, global standard interest rate regime will present exciting opportunities for our customers, and we look forward to continuing to serve them as they navigate this new market.”
Since 2018, the MPG has been diligently planning this transition, with several milestones set before the complete phase-out of JIBAR by the end of 2026. The issuance of ZARONIA-linked bond marks a critical step in developing the ZARONIA market and gaining acceptance for the new interest rate benchmark.
SBSA has been a proactive leader in the ZARONIA initiative, with Paul Burgoyne, Head of Treasury and Money Markets at SBSA, spearheading the MPG Transition Planning and Coordination Workstream.
“We are extremely pleased to have opened the new ZARONIA market with this bond issue,” said Mr. Burgoyne. “ZARONIA will strengthen the integrity of the South African interest rate market and align us with other leading global benchmarks for currencies including USD and GBP.”