CAPITAL EXPENDITURE
Tshwane still keen on bond market, after cancelled auction
The City of Tshwane still intends taking its bond notes to the market, even though its first auction in five years had to be cancelled last week after it failed to adhere to requirements. Tshwane’s foray into the market was intended to raise a 10-year bond of R1bn at a pricing of 180 basis points more than the benchmark R186 government bond. It received offers amounting to R2.1bn from 11 bidders. The city wanted to raise the debt to finance capital expenditure for the 2017-18 financial year. However, the bonds, priced at 10.725% a year, could not be issued after the auditor-general would not issue a "letter of comfort" to finalise the auction. The letter provides a level of assurance that an obligation would ultimately be met. Tshwane finance mayoral committee member Mare-Lise Fourie said on Thursday that the city had analysed its internal administrative processes and found there were shortcomings. The city was working to rectify its processes to avoid similar incidents in future, s...
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