Specialist logistics property fund Equites Property Fund raised more than R1.25-billion in the South African debt capital market in a public auction of one-year, three-year and five-year senior unsecured floating rate notes on November 10.
Equites, which develops and owns a high-quality portfolio of logistics properties in key locations in South Africa and the UK, elected to issue R385-million in the one-year note at a clearing rate of three-month Johannesburg Interbank Average Rate (JIBAR) plus 108 basis points; R447-million in the three-year note at a clearing spread of three-month JIBAR plus 146 basis points; and R418-million in the five-year note at a clearing spread of three-month JIBAR plus 159 basis points.
CEO Andrea Taverna-Turisan said the “excellent result” of the company’s second public debt auction, is “a further indication of the strong support that Equites receives from capital markets”.
Equites was seeking to raise R1-billion, with the option to upsize to R1.25-billion, off its JSE-listed domestic medium-term note programme and received R2.34-billion worth of bids from 21 different bidders across the three notes in the auction conducted by Standard Bank.
The three-year and five-year notes cleared in the mid of price guidance and the one-year note cleared below the price guidance of between 110 and 120 basis points.
The strong pricing of Equites’ debt is reflective of positive investor sentiment and a recent credit rating outlook upgrade to Positive on its AA-(ZA) rating from GCR Ratings on August 30.
Equites treasurer Warren Douglas said that, prior to the auction, Equites embarked on a deal roadshow to engage with investors, the success of which he said was evidenced by the continued diversification and increase in the debt capital market investor base with 29 financial institutions invested in Equites’ listed debt.
“Our regular engagement with debt and equity investors is key to the growth of our business and it is through these deep relationships with the investor community that Equites continues to grow from strength to strength,” he concluded.