(Bloomberg) -- South Africa’s corporate borrowers are steering clear of the bond market following May’s election, which delivered a broad coalition that investors fear may prove unstable.

While corporate debt usually rebounds in June during election years, an analysis by Rand Merchant Bank showed that this year was different: issuance contracted in the month, even as yields on benchmark government debt tumbled.

After the African National Congress lost its outright majority in the May 29 vote for the first time in three decades, it took the leaders of almost a dozen parties a month to hammer out a deal on a coalition government.

“The extended period of uncertainty drove issuers to the private placement market,” RMB credit analyst Kate Rushton wrote in a report.

Companies sold just 6.1 billion rand ($331 million) of bonds in June, down from 17.9 billion rand the month before, according to RMB data. That compares with an average of 13.2 billion rand of June issuance in the preceding 10 years.

In 2014 and 2019, the previous national election years, issuance rebounded to 16.4 billion rand in June from 8.9 billion rand in May, and 20.5 billion rand from 12.5 billion rand, respectively.

Still, year-to-date issuance of 68.4 billion rand is on track to reach RMB’s forecast of 131 billion rand for 2024.

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