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GRT
GRT
Growthpoint - Placement Of Second Tranche Of Growthpoint"s Commercial Mortgage
Backed Securitisation Notes
GROWTHPOINT PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1987 / 004988 / 06
ISIN: ZAE000037669
Share code: GRT
("Growthpoint" or "the company")
PLACEMENT OF SECOND TRANCHE OF GROWTHPOINT"S COMMERCIAL MORTGAGE BACKED
SECURITISATION NOTES
1. Introduction
Investec Bank Limited is authorised to announce that Growthpoint has
successfully placed the largest commercial mortgage backed bond issue to
date of R969 million, in a book build exercise concluded on Friday, 23 June
2006, in the second tranche of its R5 billion Commercial Mortgage Backed
Securitisation ("CMBS") programme announced in 10 October 2005. The pricing
over the 3 month JIBAR rate achieved on the 5 year term notes was as
follows:
- AAA.zaf 0.35% over 3-M JIBAR
- AA -.zaf 0.42% over 3-M JIBAR
- A-.zaf 0.71% over 3-M JIBAR; and
- BBB.zaf 1.05% over 3-M JIBAR
The weighted average price of the issue is 0.45% over the 3 month JIBAR
rate and an all in fixed rate for the 5 year term of the bonds of 8.48%
compared with 0.47% over the 3 month JABAR rate and an all in rate of 9.34%
in the first tranche that was issued in November 2005. The better spread in
the second tranche relative to the first was achieved by taking out
forward starting fixes in December 2005 and February 2006, when long term
rates were substantially lower than current levels. In addition, the
upfront and annual running costs of the second tranche are significantly
lower than were applicable to Growthpoint"s first CMBS issue of R805
million in November 2005. Notwithstanding the above factors, the spread of
45 basis points over the 3 month JIBAR is a good margin given the current
volatility in the markets.
The bonds will be listed on the Bond Exchange of South Africa at the end
of June 2006.
The bonds are 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
building in Pretoria, Healthcare Office Park in Woodmead and a state of
the art head office, sales, assembly and distribution facility of
Rectron, a leading computer components distributor in Southern Africa.
2. Rationale and Proposed Benefits
The proposed benefits of Growthpoint"s CMBS programme include:
- lower average cost of borrowings;
- diversification of borrowing sources;
- increased competitive advantage of Growthpoint to make value enhancing
acquisitions; and
- increased distributions to Growthpoint linked unit holders.
The net proceeds of the issue will be used to settle the bridging finance
that was taken to fund the Tresso and other recent acquisitions including
those mentioned above.
For and on behalf of the board
Growthpoint Properties Limited
Sandton
26 June 2006
Investment bank Sponsor
(Investec Corporate Finance) (Investec Bank)
Lead Arranger and Manager Attorneys to Growthpoint
(Investec Treasury & Specialised Finance) (Jowell Glyn & Marais)
Attorneys to the Arranger and Issuer
(Webber Wentzel Bowens)
Date: 26/06/2006 03:32:04 PM Produced by the JSE SENS Department
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