By Thomas Thale

SEVEN financial institutions have been appointed to oversee the City's bond issuing programme over the next five years.

The programme is a funding vehicle to underpin the City's yearly borrowings. The banks chosen to set up and issue the bonds are Standard Bank, Absa, Barclays, Deutsche Bank, RMB, Investec Bank and Citi Bank.

They will set up a Domestic Medium Term Notes programme that will inform the issue of City bonds of up to R6-billion until 2010.

Standard Bank, with Barnard Jacobs Mellet and Legend Capital, will be joint lead advisers for setting up the programme.

"Absa and Barclays, with African Harvest, will jointly lead and underwrite the inaugural issue … They will ensure that the City is guaranteed the success of the issue as the underwriter agrees to buy the remaining issue not taken by the market," said Jason Ngobeni, the City treasurer.

In 2004 the City took advantage of its improved credit rating to issue two bonds totalling R2-billion to recapitalise its debts and finance capital expenditure. At the time Ngobeni hailed municipal bonds as a cost-effective way of raising much-needed finance from the capital market, saying the City would continue issuing bonds of various kinds in the future.

Mankodi Moitse, the acting finance and economic development executive director, confirmed that the dealers would facilitate further note issuances under the new programme. "This measure will alleviate the City of the need to produce an offering circular for future issues," said Moitse.

In this way the City will be able to issue bonds through the programme without going through the process of appointing a team of advisers for each issue.

The programme, as well as notes issued under it, would be listed on the Bond Exchange of South Africa, said Ngobeni.
Source: Jonews

• Print this Page
• Email this article to a friend