Cell C’s curious comeback in the bond market

Analysts say Cell C is reaping the benefits of stronger government bonds globally. Picture: THAPELO MOREBUDI

But at the same time, shares in Cell C’s largest investor, 45% owner Blue Label Telecoms, have fallen out of favour. Blue Label shares have retreated by as much as a third in the year to date, partly on concerns that the mobile operator is carrying too much debt. He added that Blue Label’s shareholders may be concerned that their stakes will be diluted, particularly if Cell C’s mooted recapitalisation deal is done at lower valuations.

Imtiaz Suliman, portfolio manager at Sentio Capital, said the recovery of Cell C’s bonds might be explained by the fact that they are callable within the next month at par value. A callable bond can be redeemed by the issuer before it matures. “Bonds issued by the most established economies are trading at levels where they offer very low yields,” Theron said.

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