Vukile Property Fund has issued R796 million of senior unsecured corporate bonds with three-, five-, and six-and-a-half-year maturities. With interest of R2.7 billion, the issuance was 3.4 times oversubscribed.
The three-year notes of R214 million were placed at a margin of 119 basis points at a level better than price guidance. The five-year notes of R462 million were placed at a margin of 137 basis points and the six-and-a-half-year notes of R120 million were placed at a margin of 146 basis points.
The overall average weighted issue margin of 134 basis points 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 (LTV) 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.
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.
FirstRand Bank Limited, acting through its Rand Merchant Bank division, was appointed as sole lead arranger.
