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City of Cape Town plans return to bond market next fiscal year

In bid to raise funds for infrastructure projects.

The City of Cape Town may return to the bond market after a six-year absence as it raises money to fund infrastructure projects.

The city plans to raise as much as R2.2 billion ($140 million) in the 2016/17 fiscal year and another R3 billion over the next two years, deputy mayor Ian Neilson said in an e-mailed response to questions.

“The city will be looking at either the loan or bond market, or a combination thereof, depending on market conditions,” Neilson said. It would raise debt with 15-year maturities, he said.

Cape Town last sold debt in 2010, when it issued R2 billion of 15-year securities with a coupon of 11.16%. The city’s net debt fell to 17% of operating revenue in 2015, from 21% the previous year, according to Moody’s Investors Service, which rates the bonds A1.za.

©2016 Bloomberg News

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