JSE-listed real estate investment trust (Reit) Growthpoint Properties has successfully issued R1.8-billion in senior unsecured bonds in a significantly oversubscribed auction.

The issue initially targeted between R1-billion and R1.5-billion and attracted keen investor appetite with bids of over R6.5-billion – more than four times the initial target.

The issuance was settled at R1.8-billion at the most favourable margins achieved by Growthpoint at a bond auction to date.

Growthpoint notes that the bonds were issued across three tenors, all at record-low margins.

The three-year bonds of R579-million priced at South African Rand Overnight Index Average (Zaronia) +90 basis points; the five-year bonds of R425-million at Zaronia +100 basis points; and the seven-year bonds of R796-million at Zaronia +125 basis points.

“The strong investor support and record-tight margins achieved are especially pleasing, particularly given the current global geopolitical and local market headwinds,” says Growthpoint Properties South Africa CEO Estienne de Klerk.

Growthpoint says the issue attracted 26 separate investors, the highest seen for a corporate auction in the local market this year, reflecting the market’s continued trust and confidence in Growthpoint.

The company notes that it values its longstanding partnerships with Absa Bank and Standard Bank of South Africa, whose dedication and deep capital markets expertise as joint arrangers were instrumental in delivering this landmark transaction.

The company adds that the strong auction result follows the recent affirmation of Growthpoint's credit ratings in May.

Moody's Ratings affirmed the corporate family rating at Ba2 and lifted the outlook to positive in line with South Africa’s sovereign rating. Moody’s also upgraded Growthpoint’s national scale long-term rating to Aaa(za) from Aa1(za).

Fitch affirmed Growthpoint’s global scale rating at BB+ and national scale rating at AAA.za, driven by Growthpoint’s portfolio’s resilience to economic uncertainties and geopolitical tensions, its stable financial structure and improving performance and occupancies in its South African portfolio. 

Growthpoint says it benefits from a diversified funding platform.

It maintains a R30-billion domestic medium-term note programme listed on the JSE, providing flexible and efficient access to the debt capital markets.

The company says its funding base is well diversified across multiple bank and institutional lenders. Growthpoint also has access to significant undrawn committed revolving credit facilities of R5.7-billion, ensuring robust liquidity.

“This bond issuance reaffirms Growthpoint’s robust access to debt capital markets as an active issuer. It reflects our investors' confidence in Growthpoint's credit quality and their belief in our current business proposition and strategic long-term direction. We deeply value their trust,” concludes De Klerk.