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Growthpoint Properties Limited - Growthpoint launches largest CBS programme
Growthpoint Properties Limited
Company registration number 1987/004988/06
Share code: GRT
ISIN number: ZAE000037669
("Growthpoint")
Growthpoint Properties Limited launches South Africa"s largest CMBS programme
Growthpoint Properties Limited, South Africa"s largest listed property company
with property assets exceeding R9 billion, today successfully launched its
uniquely structured R5 billion commercial mortgage backed securitisation (CMBS)
programme.
The initial issue on the Bond Exchange of South Africa of 5-year floating-rate
notes of R805 million is the largest commercial property securitisation issue
placed in South Africa to date. The notes are linked to the 3-month JIBAR
(Johannesburg Inter Bank Agreed Rate).
The issue is secured by 36 prime investment properties across South Africa
valued at
R1,34 billion with a total gross lettable area of 259,371m2.
"The majority of our securitisation bonds were rated AAA.zaf by Fitch Ratings,
and achieved a credit margin of 0.34% over 3-month JIBAR while the transaction
achieved a weighted average credit margin of only 0.47% over 3-month JIBAR,"
says Growthpoint Properties Limited CEO Norbert Sasse.
15 investors bid for the securitised bonds, resulting in significant demand and
record low pricing. The refinancing of the securitised portion of Growthpoint"s
debt has consequently reduced the funding rate by over 1.15% per annum.
"Securitisation will benefit Growthpoint"s linked unitholders with increased
distributions. Further benefits include the lowered average cost of borrowings,
diversification of borrowing sources and the increased competitive advantage of
Growthpoint to make value-enhancing acquisitions," explains Sasse.
"Tapping into capital markets through securitisation will be central to
Growthpoint"s future funding and will result in even further financial benefits
as the required structure has already been put in place for the initial issue by
the Investec Debt Capital Markets team, lead arranger and manager of
Growthpoint"s securitisation," says Sasse.
Richard Wainwright, Head of Treasury and Specialised Finance at Investec Bank,
points out that "there is currently in excess of US$ 3 trillion securitised
paper in issue worldwide, of which over US$ 500 billion is secured by commercial
property. As with international markets, there is a growing trend towards
securitisation funding in South Africa, and Investec actively supports this
trend."
The primarily AAA.zaf bond rating was achieved, in large part, due to the unique
low-risk structure of Growthpoint"s securitisation special purpose vehicle
(SPV).
The securitised portfolio has been successfully ring-fenced into a trust,
Growthpoint Securitisation Warehouse Trust, which was registered for the sole
purpose of holding properties for its securitisation programme.
"Growthpoint Securitisation Warehouse Trust has been structured in such a way
that Growthpoint will provide all operational and strategic management services
to the trust. Growthpoint, which is managed by Investec Property Group, will
also effectively hold the trust"s property ownership powers," explains Sasse.
The trust also provides Growthpoint with "transparency" for tax purposes, as all
amounts accruing to the trust are deemed to accrue to Growthpoint as the sole
vested income and capital beneficiary. The properties held by the trust are
ring-fenced, insolvency remote and carry no operational risk of the holding
company, which is a necessary requirement for successful securitisation.
For accounting purposes, the assets of the Trust will be consolidated onto
Growthpoint"s balance sheet and from a financial perspective, the trust"s
property portfolio will be treated as if it is held directly by Growthpoint.
The Trust"s property portfolio comprises landmark properties such as Constantia
Village Shopping Centre, and houses approximately 440 tenants. By open market
value the portfolio includes 50,1% offices, 27,1% retail centres, 13,2%
industrial properties and the N1 City Hospital comprises 9,2%. The properties
are located nationwide in key nodes with 49,6% in the Western Cape, 42% in
Gauteng, 5,5% in KwaZulu-Natal and 2,9% in the Eastern Cape.
"We are pleased with the success of our initial securitisation issue, which we
believe reflects both the quality of our properties and property management as
well as the efficient manner in which the transaction was executed by the
Investec Debt Capital Markets team," concluded Sasse.
Issued on behalf of: Growthpoint Properties Limited
Norbert Sasse: CEO
Tel. Tel. 011 286 7306
Cell 083 632 1599
Investec Bank Limited
Nick Job: Head - Debt Capital Markets
Tel 011 286 9072
Cell 082 450 6899
By: Marketing Concepts
Sandy Davey/Bronwen Noble
Tel 011 880 2213
Cell 083 453 6668 (Sandy)
Cell 082 855 4349 (Bronwen)
23 November 2005
Investment bank and Sponsor: Investec Limited
Date: 23/11/2005 02:26:05 PM Produced by the JSE SENS Department
