Professional Services Editor

THE City of Johannesburg appointed a bond adviser consortium last week comprising Barclays Bank, African Harvest Capital and Ernst & Young Corporate Finance to manage, structure and arrange a debut bond issue.

This will be the first issue of its kind under the new Municipal Finance Management Act and the first municipal bond since 1993.

The city has a capital programme backlog of more than R10bn over the next five to 10 years.

These projects include inner-city rejuvenation, roads and the renewal of electricity and water infrastructure.

Councillor Parks Tau said the proceeds of the issue would be used to address the infrastructure backlogs .

Previously the city relied on bank loans to raise capital for infrastructural projects.

City treasurer Jason Ngobeni said the bond issue should provide Johannesburg with more appropriate long-term and sustainable finance funding for its infrastructure projects.

The issuer of a bond guarantees to pay interest (coupons) annually, and to repay the principal debt on a specified date.

Nov 24 2003 07:17:28:000AM Sanchia Temkin Business Day 1st Edition