Growthpoint South Africa CEO Estienne de Klerk
JSE-listed real estate investment trust (Reit) Growthpoint Properties has issued a R1-billion senior unsecured bond with a ten-year maturity.
The ten-year note was placed at a margin of 185 basis points above three-month Johannesburg Interbank Average Rate, which is the most favourable pricing achieved in several years, the Reit says.
“In the past 12 months, Growthpoint has managed to raise close to R2.5-billion of ten-year funding in the listed bond market at compressing spreads.
“This demonstrates the strength of Growthpoint’s credit quality and the long tenure of the bonds is a vote of confidence from investors in the future of the business,” notes financial services firm Standard Bank debt capital markets South Africa syndicate head Carl Wiesner.
The offering came after strong investor interest in long-term Growthpoint debt, which the sole arranger Standard Bank successfully executed as a private placement of R1-billion.
The bond issue attracted multiple investors, reflecting the market’s continued trust and confidence in Growthpoint.
“We are delighted with the strong support received from our investor base and the success of the long-dated debt issuance, especially given the current global turmoil and local market challenges,” says Growthpoint Properties South Africa CEO Estienne de Klerk.
The company also successfully privately placed a R1-billion green bond for ten years for R650-million and seven years for R350-million. A portion of the proceeds of the green bond will be used to finance renewable energy projects for its property portfolio.
Growthpoint recently signed a power purchase agreement with Etana Energy for 195 GWh of renewable energy a year, representing 32% of its total current annual electricity consumption in addition to its long-standing investment in solar plants at its properties, thereby furthering its climate commitment of being carbon neutral by 2050.
“We value our investors’ trust in Growthpoint’s proposition, their confidence in its sound creditworthiness and belief in our long-term direction,” says De Klerk.
Growthpoint has both Fitch and Moody’s credit ratings. Its Fitch global scale rating is BB+ and national scale rating is AAA.za, and its Moody’s global scale rating is Ba2 and national scale rating is Aa1.za.
Its latest issuance reaffirms Growthpoint’s robust access to debt capital markets, he states.