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Johannesburg - Ekurhuleni municipality has issued an R800m amortising bond, an official said on Sunday.
The 15-year bond was the first issued by a South African municipality and was an indication of the confidence investors had in the municipality, said finance committee member Moses Makwakwa, who will present the municipality's budget on Thursday.
In the past three years, Ekurhuleni has issued more than R2.4bn in bullet bonds with maturities ranging from 10 years to 12 years.
Makwakwa said in a statement that the issuing of bonds had led to the building and upgrading of the municipality's services and infrastructure.
Ekurhuleni acting chief financial officer Andile Mahlalutye said although amortising bonds were uncommon in the local bond market, they were a well-entrenched product in the bank loan market.
"In order to test the market's appetite for an amortising bond, we offered investors both a 15-year bullet profile bond and a 15-year amortising profile bond with semi-annual equal capital repayments," he said.
"The bond offering was well supported, receiving over R2bn in bids from 15 different investors, with almost R1.2bn of bids towards the amortising bond, at an average weighted spread below the published price guidance."
The proceeds would be used by the municipality to fund its infrastructure programme.
