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Investec Capital Markets and IDG press release


Umgeni Water and Investec Capital Markets are proud to announce the success of the most recent Umgeni Water long-term bond. The UG21 fixed rate bond issued in March 2010 under the new Domestic Medium Term Note (DMTN) Programme was 2.6 times over-subscribed on its R 600 million issue.

Mzimkulu Msiwa (CE) from Umgeni Water said:" We are pleased with the success of our bond, at a time when all the other State Owned Enterprises are active issuers in the local bond market and there is a risk that investors may be overweight on SA Government risk."

Investec Capital Markets and IDG Financial Services were the co-lead arrangers and were responsible for the issuance of the UG21 into the debt capital markets. Both institutions established the DMTN Programme last year and it was signed in November 2009. The bond, which pays a coupon of 10.70% semi-annually and has an 11 year maturity, is expected to fund the corporation's CAPEX requirement for 2011 and to be used towards the redemption of the UG65 bond maturing in June 2010.

Rob Moody, from Investec Capital Markets' Debt Origination team said: "This is a vote of confidence in Umgeni Water's performance. Investors noticed that Umgeni has successfully completed a 5 year turn-around plan and that the business was being well managed without any compromise of its mandate to treat raw water and the subsequent bulk distribution of potable water through its infrastructure to municipalities."