Seeking Alpha

Plunging AngloGold bonds revive calls to spin off assets

  • 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.
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