Fortress raises R1.6bn in landmark Zaronia-linked bond

Fortress Real Estate Investments has raised R1.6 billion through a seven-year note issuance, marking the first time a JSE-listed property group has priced debt against South Africa’s new benchmark rate, Zaronia.

The issuance, concluded under the group’s domestic medium-term note (DMTN) programme, was priced at Zaronia plus 161 basis points – equivalent to Jibar (Johannesburg Interbank Average Rate) plus 145 basis points after accounting for the credit adjustment spread.

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This positions the transaction as a milestone in the local market’s transition away from Jibar towards the Zaronia reference rate.

The move reflects a broader shift in South Africa’s financial system, where institutions are gradually adopting Zaronia as the preferred benchmark for pricing debt instruments.

Fortress said the latest issuance builds on strong investor demand seen in March, when it raised just over R1 billion in a bond auction that attracted bids of over R3.7 billion.

The group’s CFO Ian Vorster said the transaction highlights continued confidence in both the group and the local debt capital market.

“Following our successful bond auction in March, the placement of an attractively priced seven-year unsecured note is a further demonstration of investor confidence in Fortress and in South Africa’s credit market,” he said.

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Proceeds from the issuance will be used to refinance existing debt and for general corporate purposes, as the group looks to optimise its funding structure and extend its debt maturity profile.

It said the longer tenor and favourable pricing support Fortress’s strategy to deepen its engagement with capital markets while diversifying funding sources.