R500 million Vukile unsecured bond oversubscribed

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Vukile Property Fund  CEO Laurence Rapp says the company is delighted with the strong support received from the auction. Vukile Property Fund CEO Laurence Rapp says the company is delighted with the strong support received from the auction.


Vukile Property Fund, on Tuesday, announced that its R500 million senior unsecured corporate bonds with three and five-year maturities were both substantially oversubscribed.

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.

Last month, the JSE-listed real estate investment trust (Reit) Vukile, said it will sell its Namibian assets valued at nearly R1 billion by the end of 2020,  which it wanted to invest in SA and Spain.

The company first invested in Spain in 2017, and the group has since acquired interests in two Spanish portfolios through its partner Castellana Properties, which had performed better than expected, it said.

Its Spanish exposure was worth R17bn and accounted for 48% of its total assets. Its directly held SA properties are worth about R15bn, while its Namibian assets are worth about R950m.

It also owns stakes in SA property groups Fairvest and Arrowhead Properties, worth R552m and R515m, respectively.


Listed Property / REITs  |  Arrowhead Properties  |  Vukile Property Fund  |  Laurence Rapp  |  Fairvest Property Holdings Ltd  |  Castellana Properties Socimi SA  |  Marcus Veller


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