Vukile Property Fund today issued R500 million senior unsecured corporate bonds with three and five-year maturities.
The issue was significantly oversubscribed with demand exceeding the maximum offer by 4.2 times. It drew orders from 15 different investors and attracted bids worth more than R2 billion. The three-year bonds were placed at a favourable margin of a 141bps, which was below guidance.
“We are delighted with the strong support received. The success of the auction shows strong support for Vukile and has further diversified our debt capital market investors,” says Laurence Rapp, CEO of Vukile.
The capital raised will increase Vukile’s split of unsecured debt and be used to redeem secured notes that are expiring in June and July 2020. As the proceeds of the issuance will be used to repay existing debt, the issuance is neutral for the company’s loan-to-value (LTV) ratio.
Acting as sole lead arranger, Absa Corporate and Investment Banking applauded the success of Vukile’s bond issue. “The auction received wide institutional support based on the high quality of Vukile’s credit profile, balance sheet and underlying business strategy,” says Marcus Veller from Absa Debt Capital Markets.
GCR Ratings recently upgraded Vukile’s national scale issuer ratings to AA-(ZA) and A1+(ZA) for the long and short term respectively, with a stable outlook.
JSE-listed Vukile is a leading South African retail REIT with R35bn of property assets of which 48% are in Spain through its 82.5% held subsidiary Castellana Properties SOCIMI SA.