Johannesburg – Rand Water is flush with cash today after redeeming its bond RW23 listed under the ZAR10 billion Domestic Medium Term Note program (DMTN)..
The bond was listed with the Johannesburg Stock Exchange in 2013 and matures on Sunday, (10 December 2023).
Rand Water has announced that it will settle the last coupon of this bond and the principal amount of R1,23 billion on Monday, (11 December 2023).
The bond settlement is achieved through prudent financial management and strict Public Finance Management Act (PFMA) adherence that Rand Water applies in its finance management and strict financial discipline through its board-approved Corporate Treasury Policy (RWTP) to mitigate the possible refinancing risks.
Amid all the economic challenges, Rand Water said it successfully invested the redemption reserve funds in investment instruments that yielded a competitive return averaging 9.15%.
Rand Water said it utilises bonds and a mixture of bilateral long-dated loans from Assets Managers, development finance, and banking institutions to meet its external funding requirements when necessary and for its infrastructure programmes.
The current bond is not the first to be settled by Rand Water.
In April 2021, Rand Water successfully redeemed the RW21 bond and intends to redeem RW28 in 2028.
Redeeming bonds validates an organisation’s solid financial status, which applies to Rand Water.
Rand Water said it intends to use this measure to build and create future sustainability as bond settlement serves as a catalyst toward retaining investors’ confidence.
The redemption of the bond (ZAR10 billion DMTN) coincides with Rand Water’s celebration of its 120 years of existence and the unveiling of its 2022/ 2023 Integrated Annual Report, which was launched and submitted to Rand Water Shareholder, the Minister of Water and Sanitation, Mr. Senzo Mchunu (MP) on 14 November 2023 during the Annual General meeting.
During the Annual General Meeting, the Minister commended Rand Water for improved financial performance and profitability amidst negative headwinds, a healthy balance sheet, and a strong liquidity and solvency position.
These events also coincide with the Fitch Ratings affirming the credit rating of ‘AA+’ positive outlook, which Rand Water obtained on Monday, 7 November 2023.
