On 13 August 2014 Global Credit Ratings affirmed its initial rating assigned to Delta Property Fund Limited of BBB+(ZA) and A2(ZA) in the long and short term respectively. The outlook was accorded as Stable.
This affirmation follows Delta’s announcement in July 2013 that it has successfully entered the debt capital markets with the completion of its debut commercial paper issuance off a newly established R2 billion Domestic Medium Term Note Programme registered with the JSE.
Sandile Nomvete, Chief Executive of Delta commented:
“The affirmation of our investment grade rating is underscored by the robust credit profile of our sovereign tenants, which makes up 64% of rentals. We are continuously considering various funding sources and ways to reduce the cost of capital as the portfolio is bedded down and cost structures optimised.”
Bronwyn Corbett, Chief Financial and Chief Operating Officer added:
“Since listing in 2012 we maintained our growth trajectory. Today the portfolio is valued at R7.3 billion, compared to R2.1 billion at listing. Going forward, our aim is to reduce the loan to value ratio to more comfortable levels in the medium term to provide us with headroom for further growth.”
Eyal Shevel, Head of Corporate Ratings at Global Credit Ratings commented:
“An improvement in the current rating will mainly emanate from the fund’s proven ability to extract value from recent acquisitions. Moreover the fund will have to manage a reduction in the net LTV ratio to below 40%.
“We will also take a positive view on stable long term income and portfolio growth, coupled with enhanced portfolio quality and strong performance from non-government tenanted assets despite the challenging macro-economic environment.”