(Bloomberg) -- Investors are betting that African Bank Ltd.’s odds of survival have improved following a central bank rescue.

Since April 8, yields on the Johannesburg-based company’s $280 million of bonds due October 2020 have dropped 12 basis points to 10.42 percent in London on Thursday. The securities started trading last week after South Africa’s central bank helped revive what was once the country’s largest provider of loans not backed by assets.

The notes are “definitely feeling better bid today,” said Petrie van Vuuren, a London-based credit trader for a unit of FirstRand Ltd., adding that a rally in emerging markets on Wednesday had helped to improve sentiment toward riskier assets. “Trade going through remains pretty small though -- trade sizes vary from $500,000 to $1 million in nominal value. Still, that’s a notable improvement in liquidity compared to a week ago.”

African Bank collapsed in August 2014 with senior-debt investors owed more than 40 billion rand ($2.72 billion). As part of a revival, which involved a fresh banking license and setting up a new lender, the old bank’s investors were swapped into new debt instruments on April 4, with bondholders able to recoup their investments after taking an initial 10 percent haircut.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at To contact the editors responsible for this story: Dale Crofts at, Vernon Wessels, Andrew Blackman

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