18 October 2004 Press Release Joburg's R6-billion Funding Program Joburg will be implementing a six year funding strategy to the tune of R6 billion in the current financial year to support the City's capital investment program. City Treasurer Jason Ngobeni said, " This will be executed via a Domestic Medium Term Note program that will allow the City to issue unsecured and or secured registered funding instruments of any nature as and when necessary with an aggregate principal amount that cannot not exceed the authorized program amount". The funding programme will run until 2010 and involves the issuing of three main instruments, namely institutional and retail bonds, commercial paper with a maximum maturity of one year and bank loans. "Joburg will use this funding approach instead of the regular issuing of debt on a project by project basis", said Ngobeni. Some of the advantages of a DMTN program include: They are far cheaper to use as a mechanism for debt raising than conventional outright bond issues Greater flexibility that allows the City to issue appropriate debt instruments given prevailing market and interest rate conditions The program as well as Notes issued under it will be listed on the Bond Exchange of South Africa An important aspect of the program is its greater level of transparency, which according to Mayoral Committee Member for Finance and Economic Development Parks Tau "eliminates the surprise element because investors will know upfront the funding need of the City within the period of the program". "We will be appointing advisors, arrangers, market makers and other specialists but are also considering other forms of funding such as public private partnerships, securitization and other forms of balance sheet funding for capital projects, he added. Tau said, " As a leader and innovator amongst municipalities, Joburg is also in compliance with all the underlying principles of the Municipal Finance Management Act 56 of 2003 ". Numerous well known business institutions are currently making use of the DMTN program in South Africa. Ends For more information Contact City Treasurer Jason Ngobeni: 242 1047 Virgil James Media Liaison Officer Communications Telephone: 407 7226 Facsimile: 403 3494 Cell: 082 467 9415 Email: virgilj@joburg.org.za