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GRT
GRT
Growthpoint Properties Limited to securitise R1,7 billion property portfolio
Growthpoint Properties Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1987/004988/06)
Share code: GRT ISIN: ZAE000037669
("Growthpoint")
MEDIA RELEASE FROM GROWTHPOINT PROPERTIES LIMITED
21 June 2006
Growthpoint Properties Limited to securitise R1,7 billion property portfolio
Growthpoint Properties Limited, South Africa"s largest JSE-listed property
holding and investment company with property assets exceeding R13,5 billion,
today announced that it would be accessing a further R969 million from the debt
capital markets as part of its uniquely structured R5 billion commercial
mortgage backed securitisation (CMBS) programme.
This exceeds the initial issue of R805 million in November 2005 and will be the
largest commercial property securitisation issue placed in South Africa to date.
The issue is expected to be listed on the Bond Exchange of South Africa before
the end of June 2006 and will comprise 5-year floating-rate notes linked to the
3-month JIBAR (Johannesburg Inter Bank Agreed Rate). Growthpoint expects to
raise funding at an all-in costs for the notes of between 8,5% to 8,75% having
already secured interest rate fixes which will facilitate the swap out of
floating rates for fixed funding.
"We anticipate achieving substantial savings in the margin as a result of the
securitisation structure, certainly compared to conventional bank funding," says
Norbert Sasse, CEO of Growthpoint Properties Limited.
Furthermore Sasse points out that the upfront and ongoing costs of this
securitisation are reduced as Growthpoint is tapping into an existing structure
put in place for the initial issue by the Investec Debt Capital Markets team,
lead arranger and manager of Growthpoint"s securitisation.
"Securitisation has been an accepted alternative source of finance for some 25
years in the international debt capital markets. We are pleased to be able to
provide these solutions to our South African clients such as Growthpoint" says
Richard Wainwright, Head of Investec"s Treasury and Specialised Finance
division.
The issue is secured by 25 prime investment properties across South Africa
valued at over R1,7 billion, with a loan to value of approximately 60%. 21
of the properties were purchased in Growthpoint"s most recent acquisition from
Tresso with the remaining four also being recent acquisitions including City
Mall Klerksdorp, the Auditor General"s building in Pretoria, Healthcare Park and
an office building acquired from International company Rectron, the leading
computer components distributor in Southern Africa
Growthpoint"s securitisation special purpose vehicle (SPV) has a unique low-risk
structure with the securitised properties successfully ring-fenced into a trust,
the Growthpoint Securitisation Warehouse Trust, which was registered for the
sole purpose of holding properties for its securitisation programme.
"This second tranche of securitisation will further benefit Growthpoint"s linked
unitholders with increased distributions. Additional benefits include the
lowered average cost of borrowings and the increased competitive advantage of
Growthpoint to make value-enhancing acquisitions," explains Sasse.
Growthpoint has stated that tapping into debt capital markets through
securitisation is central to its future funding and Sasse anticipates a further
R1 billion issue before the end of the year, underpinned by the bulk of the
Metboard Properties Limited property portfolio.
Metboard, with its prime industrial portfolio valued at approximately R2
billion, is to be consolidated into Growthpoint with effect from 30 June 2006
with all the conditions and approvals precedent for this transaction now
fulfilled.
"We were pleased with the success of our initial securitisation issue, which
reflected 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, and expect Growthpoint"s second tranche of securitisation
to be equally successful," concluded Sasse.
Issued on behalf of: Growthpoint Properties Limited
Norbert Sasse: CEO
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)
Date: 21/06/2006 05:13:12 PM Produced by the JSE SENS Department
