Personal Business

City of Cape Town

The City of Cape Town is one of the economic giants among South African cities, having the second largest metropolitan municipality, and generating about 11% of the country’s gross domestic product.

Standard Bank Group was selected to help Cape Town in its growth. In 2009, and again in 2010, we were appointed lead arranger in two bonds issued by the city.

The first bond (CCT02), a 15-year benchmark bond, raised R1.81-million for a final issuance of R1.2-million. Issued in June 2009, it is set to mature in 2024. Distribution was diverse in investor terms, with 12 investors being allocated paper. What made this bond all the more remarkable was its success, given the economic environment in 2009.

The second bond of R2-billion, with a term of 15 years, was 1,5 times oversubscribed, reflecting the market confidence in the financial stability of the city.]

The funds raised from the first bond issue have been used to fund major infrastructure projects around the city over the past year. Both bonds are listed on the Bond Exchange of SA, and Standard Bank Group is proud to have given ordinary South African investors the opportunity to be part of the growth of South Africa.

Summary

Sector expertise Infrastructure
Client City of Cape Town's
Deal size R2-billion
Duration 15-year bond
Key features Both bonds are listed on the Bond Exchange of SA and Standard Bank Group has given ordinary South African investors the opportunity to be part of the growth of South Africa.
Noteworthy Only two municipalities in South Africa use bond issues as a means of borrowing. This is because of the complexity and costs of the process, which require large sums to be raised for it to be cost effective.