Redefine Properties has successfully raised R781 million via a public bond auction, driven by strong demand from funders and healthy liquidity in the debt capital markets.
The REIT’s bond issue was oversubscribed by 1.77 times, receiving R1.4 million in bids that resulted in an allocation of R781 million across five- and seven-year tenors at an auction held on the 11th of March 2024. Five-year notes of R377 million were placed at a margin of 149 basis points, and seven-year notes of R404 million were placed at a margin of 165 basis points, both over a three-month Johannesburg Interbank Average Rate (JIBAR).
The issue was launched through Redefine’s JSE-approved R30 billion domestic medium-term note programme, with the nominal R377 million and R404 million in unsecured floating rate notes set to mature in 2029 and 2031 respectively.
“The longer-dated seven-year bond in particular attracted substantial interest with just over R400 million issued at the lower end of the market pricing guidance. The bond issuance will extend Redefine’s debt maturity profile and further diversifies our debt sources,” said Ntobeko Nyawo, Chief financial officer at Redefine.
The proceeds from the bond will be used to repay upcoming bond maturities during FY24 and as such, Redefine’s loan-to-value (LTV) ratio will remain unchanged.
