SA National Road Agency Limited (Sanral) bond yields have plunged since the Constitutional Court ruled that tolls could be charged on Gauteng freeways, easing a drain on government finances.

The yield on the agency’s eight-year debt has dropped 18 basis points to 6.88 percent since September 20, when the court ruled in its favour. The extra yield investors demand to hold Sanral’s debt over benchmark government securities has fallen to a two-year low of 39.6 basis points, compared with the 346 average for emerging-market corporate debt, according to JP Morgan Chase.

The ruling eliminated the need for the government to cover Sanral’s operating expenses and to guarantee for its bonds, Moody’s Investors Service said.

Source: Bloomberg