Vukile Property Fund (JSE: VKE) has issued R796m of senior unsecured corporate bonds with three-, five- and six and a half-year maturities. Strong demand from the market was indicated with total interest of R2.7bn resulting in the issuance being over 3.4 times oversubscribed.
The three-year notes of R214m were placed at a margin of 119bps, at a level better than price guidance. The five-year notes of R462m were placed at a margin of 137bps and the six and a half -year notes of R120m were placed at a margin of 146bps, both favourably priced at the lower end of price guidance.
The overall average weighted issue margin of 134bps is significantly tighter than the DCM notes maturing in FY2025 that the proceeds of the issuance will be used to repay. By deploying the proceeds to repay existing DCM maturities, Vukile’s loan-to-value ratio is unchanged while interest costs are lowered.
“We are pleased with the strong demand and favourable pricing received. The substantial support for the auction demonstrates the market’s confidence in Vukile’s customer-centric approach in driving value creation for stakeholders and our strong balance sheet,” says Laurence Rapp, Chief Executive Officer of Vukile.
FirstRand Bank Limited, acting through its Rand Merchant Bank division, was appointed as sole lead arranger. “The keen investor interest, with over 19 institutions participating in the auction, demonstrates Vukile’s strong position as a meaningful and regular DCM issuer. Vukile’s positive financial results and a supportive market culminated in an excellent auction and issuance outcome,” says Farishta Mansingh of RMB.
Maurice Shapiro, Group Head of Treasury of Vukile, remarks, “The bonds' competitive pricing showcases Vukile's exceptional credit quality, robust balance sheet, and well-defined business strategy. We value the instrumental contribution of RMB as arranger and appreciate the ongoing support of our investors. Robust partnerships and proactive stakeholder engagement reflect our core values and further our success.”
In July 2024, Global Credit Rating Company Limited (“GCR”) released a credit rating announcement in which it placed Vukile's national scale long term issuer rating of AA(za) on Positive Outlook due to continued focus on growing its high-quality, diversified retail portfolio.
Vukile is a specialist retail real estate investment trust (REIT) developed on the foundation of a well-defined, specialised growth strategy, with a focus on owning dominant retail assets across South Africa and Spain. Vukile adopts a proactive approach to asset management. It is focused on customer centricity as the driver of value creation and acts as centres of growth by creating value for all its stakeholders.
Vukile’s assets are valued at around R40 billion, with 40% in South Africa and 60% in Spain. The Spanish assets are held in the 99.5% Vukile-owned Madrid-listed subsidiary, Castellana Properties Socimi.
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Released by:
Vukile Property Fund
Laurence Rapp, CEO
Tel: 011 288 1032
Website: www.vukile.co.za
Twitter: https://twitter.com/VukilePropFund
