Equites Property Fund raises R750m in debt auction at lowest levels to date

Equites CEO, Andrea Taverna-Turisan.
CEO of Equites Property Fund, Andrea Taverna-Turisan.

Equites Property Fund has raised R750 million in the South African debt capital market in a public auction of senior unsecured floating rate notes maturing in June 2026 and June 2028.

On Tuesday, the 5th of September 2023, the REIT issued R300 million in a 2.75-year note at a margin of 129 basis points and R450 million in a 4.75-year note at a margin of 139 basis points.

Equites cleared inside price guidance for both the 2026 and 2028 notes. In total, R2.45 billion of bids were received from 16 different investors, resulting in a book that was 3.3 times oversubscribed in an auction conducted by Nedbank CIB.

“Compared with our last auction in November 2022, we achieved significantly better results, clearing 17 bps and 20 bps lower for the 3- and 5-year notes, respectively. Equites continues to be a regular issuer in the debt capital markets. As part of our strategy to reduce our loan-to-value ratio, the funds will be used along with asset disposal proceeds to repay existing debt,” commented Warren Douglas, Treasurer and Head of Risk Management at Equites.

Once again, our public debt auction yielded an excellent set of results with strong institutional support from a wide variety of investors in the capital markets. This indicates strong market support for our business strategy, and the confidence which South African investors have in Equites,” commented Andrea Taverna-Turisan, CEO at Equites.

The strong pricing of Equites’ debt is reflective of positive investor sentiment and a recent credit rating affirmation of AA-(ZA) from GCR Ratings on the 7th of July 2023.