/ 21 September 2007

Jo’burg raises R157-million through bond issue

The city of Johannesburg has raised R156,9-million during the initial public offering of its new retail bond, the ”Jozibond”.

Launched in August, Jozibonds are targeted at individuals and residents of Johannesburg, allowing them the opportunity to invest in the city.

Speaking at the listing of the Jozibonds on the Johannesburg Securities Exchange (JSE) on Friday, mayor Amos Masondo said the proceeds of the bonds would be used to fund development projects.

The bonds would also ”encourage the culture of saving among communities,” Masondo said.

Johannesburg was the first city in Africa to raise money through a municipal bond issue and this was the first listing to date of a municipality on the JSE.

The bonds represented a milestone in the history of Johannesburg, Masondo said.

Through the purchasing of the bonds, residents now had access to the JSE, Masondo added.

The bond had an added advantage ”in that [it] is tradeable in the secondary market, providing investors the opportunity to unlock value as the market moves in their favour”.

The low entry level of R1 000 made the bonds affordable — especially as no fees, commissions or other charges were payable.

The initial offer was launched to the public on August 7 and closed a month later on September 7.

The launching of the retail bonds was not a once-off event as the city wanted to make retail bonds an integral part of boosting a culture of savings in the country, Masondo said. – Sapa