23 March 2011
Standard Bank Group assists City of Johannesburg in raising successful R850-m 10-year
Standard Bank Group has successfully issued a R850-million, 10-year bond for the AA-rated City of Johannesburg, South Africa, at JIBAR (Johannesburg inter-bank agreed rate) plus 195 basis points.
Andrew Costa, Head Debt Capital Markets at Standard Bank Group, says: "Standard Bank is delighted with the success of the bond issue. It was a difficult time for a municipality to issue given the quantum of issuance in the bond market at the moment especially with the big banks who have issued approximately R15 billion already this year and add to that the pending municipal elections.
"However investors have found comfort in the quality and price of the paper issued the track record of management and the future potential of this city."
The bond, a senior unsecured fixed rate bond paying a coupon of 10.78%, was issued on 23 March 2011 within the price guidance provided to the market.
"We have a long history of innovation with the City of Johannesburg, having partnered with them to establish the first municipal domestic medium-term note programme in 2005, the first listed municipal Retail Bonds in 2007 and the first municipal commercial paper issuance (paper with a duration of under 12 months) in 2009. We were very happy to partner with them again on this bond issue, says Mr Costa.