The launch of the first municipal bond in South Africa under new legislation received an overwhelmingly positive response from the market when it was launched in April 2004. Pegged at R1-billion, the bond is not guaranteed by government nor secured by City assets.
Johannesburg Executive Mayor Amos Masondo hailed the issue as a "historic moment for the City of Johannesburg".
Market interest in the second municipal bond was better than expected when the partially guaranteed R1-billion bond was placed on auction in June.
Jason Ngobeni, City Treasurer, explained that proceeds from the bonds would go towards refinancing the City's debts and funding capital expenditure. According to Ngobeni, the City entered into onerous debt arrangements in the late 1990s, at a time when it was experiencing financial distress.
Part of the proceeds from the bonds will therefore go towards refinancing these debts. Refinancing its current debt obligations through the bonds would save the City about R20-million annually over the next six years. The rest of the proceeds will be used to finance the development of infrastructure in the city.
Offering circular for the first bond The City of Johannesburg has issued an offering circular for its R1bn municipal bond. This circular does not constitute an offer to sell or a solicitation for an offer to buy the bonds.
Click here to read the PDF document
Offering circular for the second bond The City of Johannesburg has issued an offering circular for its second R1bn municipal bond. This circular does not constitute an offer to sell or a solicitation for an offer to buy the bonds.
Cover (In PDF format)
Circular (In PDF format)
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