Plunging AngloGold bonds revive calls to spin off assets

|About: AngloGold Ashanti Limited (AU)|By:, SA News Editor

The recent sharp slide in AngloGold (AU -1.8%) bonds reignites calls from investors for the miner to spin off burdensome South African assets.

Yields on AU’s dollar debt due July 2020 surged 117 bps since being sold on July 25 to a record 9.59% on Aug. 7, while the average yield on dollar bonds of emerging market metals and mining companies rose 18 bps.

AU hasn’t heeded calls to spin off assets in South Africa, which is beset with strikes and higher costs; Gold Fields (GFI -4.7%) put most of its South African mines in a new company in February, a strategy that activist shareholder John Paulson has said AU should copy.