The South African National Roads Agency Limited (Sanral) on Friday raised R1-billion through its third bond auction on the domestic market.

The agency was raising money to fund new toll road infrastructure in Gauteng as well as for upgrading and improving existing roads.

This was the first time since July that R1-billion has been raised in a single bond market transaction.

“It’s the first time in a long time that we have seen a bond issue of this size,” reiterated Rand Merchant Bank (RMB) head of distribution David Rajak.

“Domestic fund mangers still want good credit and Sanral has been fair with its funding levels in tough market conditions,” added Rajak.

In its third auction, which will be settled on Monday, Sanral tapped into its three fixed-rate bonds maturing in 2018, 2022 and 2028.

RMB said that bids for R1,4-billion were received. The bonds were placed at market spreads of 1,9% to 1,98% compared with Sanral’s second auction in September when bonds were placed at spreads of up to 2,2%.

“The improved spreads are another indication of how demand for Sanral’s bonds has strengthened in a weakening credit market,” Rajak said.

Sanral aimed at raising R24-billion over the next few years to fund 185km of new toll road infrastructure including the Gauteng freeway improvement project. This involved upgrading the N1 to Pretoria, the Johannesburg ring roads and the R21 from OR Tambo International Airport to Pretoria.

These upgraded roads would become toll roads and would be the first automated toll roads in South Africa.