Vukile Property Fund (JSE: VKE) has issued R526m of senior unsecured corporate bonds with three- and five-year maturities. Indicating significant market interest, the initial target issuance size of R500m was 4.1 times oversubscribed, attracting bids of R2.0bn.
Three-year notes of R200m were placed at a margin of 130bps, and five-year notes of R326m were placed at a margin of 144bps, both favourably priced at levels better than guidance.
“We are pleased with the strong demand and favourable pricing received, particularly in light of the current challenging macro-environment -- it is an outstanding result. In this context, the substantial support for the auction demonstrates the market’s confidence in our robust business model,” says Laurence Rapp, CEO of Vukile.
Absa Corporate and Investment Bank, a division of Absa Bank Limited, acted as sole lead arranger. “The keen investor interest that the auction yielded, coupled with the bonds' competitive pricing, showcases Vukile's exceptional credit quality, strong balance sheet, and well-defined business strategy,” says Marcus Veller of Absa.
In July 2023, GCR Ratings affirmed Vukile’s national scale long-term issuer rating of AA(za) and its national scale short-term issuer rating at A1+(za), with a stable outlook.
Vukile is a consumer-focused retail real estate investment trust (REIT), differentiated by its sector specialisation and international diversification. It has assets of R37bn in South Africa (42%) and Spain (58%) through its 99.5% held Madrid-listed subsidiary Castellana Properties Socimi. Vukile acts as a centre of growth by creating value for all its stakeholders.
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