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Vukile - Vukile launches R2 billion securitisation programme
Vukile Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/027194/06)
JSE code: VKE & ISIN: ZAE000056370
For further information call
Gerhard van Zyl, CEO Vukile Property Fund Limited
on (011) 288 1002
VUKILE LAUNCHES R2 BILLION SECURITISATION PROGRAMME
Johannesburg, 31 October 2005 - Listed property loan stock company Vukile has
launched a R2 billion commercial mortgage backed securitisation (CMBS) programme
arranged by Absa to refinance its existing bank debt and cut the cost of funding
its commercial property investment.
Chief executive, Gerhard van Zyl, said the establishment of the securitisation
programme marked the achievement of one of the company"s principal strategic
objectives. "It will reduce the overall cost of our debt, taking all upfront,
ongoing and hedging costs to implement the programme into account, from 11.2% to
approximately 10.0% thereby enhancing returns to our unitholders and enabling us
to compete more effectively in the commercial property market. The programme
has been set up so that it will be easy to tap into this market and achieve
similar if not better funding rates for future debt," he said.
A key feature of the programme is that the securitised property portfolio,
comprising 39 of the 52 Vukile properties, is owned directly by Vukile and not
by a special purpose vehicle. "We are particularly pleased with this result as
it meant that the transaction could be done within our existing corporate
structure and there was consequently no need to transfer properties, thereby
saving time and costs," van Zyl said.
The first issuance under the programme comprises five and seven year floating
rate notes for a total amount of R770 million. The floating rate notes are
converted into fixed rate exposure for Vukile by way of interest rate swaps.
Settlement is scheduled for 7 November 2005. The securitisation notes have been
rated by Moody"s Investor Services.
Absa Commercial Property Finance (ACPF) has provided a R450 million term loan to
fund the 13 properties outside the securitisation structure and to facilitate
the purchase of future properties. "An integrated approach between the
Commercial Property Finance and the Capital and Debt Markets teams ensures a
holistic solution for the client," said Lisa Forshey, general manager of Absa
Listed Sector Debt.
The Vukile securitisation is the second CMBS to come to the South African market
following the PROPS deal, also arranged by Absa, in November 2004. Riaan Kemp,
head of Capital and Debt Markets at Absa, said Absa was privileged to be leading
the technological advancement of property finance and expected to see further
use of this funding tool by its clients during 2006.
CMBS structures have been used worldwide since the late Nineties as an
alternative to conventional bank loans and are a favoured instrument for
reducing the cost of funding commercial property portfolios. It currently
constitutes some 15% of European securitisation issuance and has been used to
fund major projects such as London"s Canary Wharf.
Had Vukile"s securitisation programme been in place for the March 2005 financial
year, earnings and headline earnings per linked unit would have been
approximately 5% higher than that reported.
Vukile currently has a portfolio of 52 properties with a gross lettable area of
676 961m2. The company also manages and has a 75% interest in MICC Property
Income Fund, which has 40 properties with a gross lettable area of 395 812m2.
Together these portfolios have a gross asset value in excess of R3 billion.
Issued by du Plessis Associates on behalf of Vukile Property Fund Limited. dPA
contact Helen McKane Tel : +27 11 728 4701, Fax: +27 11 728 2547, Mobile: 082
330 2034 or e-mail: vukile@dpapr.com
Date: 01/11/2005 07:05:51 AM Produced by the JSE SENS Department
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