Vukile raises R250m via securitisation

Posted On Tuesday, 22 September 2009 02:00 Published by eProp Commercial Property News
Rate this item
(0 votes)

Vukile Property Fund has raised R250m through Vukile Investment Property Securitisation to reduce the cost of funding its commercial property investment.

Laurence RappProperty loan stock company Vukile Property Fund on Tuesday said it had raised R250 million through Vukile Investment Property Securitisation (VIPS), the commercial mortgage-backed securitisation programme established by the company to reduce the cost of funding its commercial property investment.

The company said the funds were raised through the placement of two tranches of notes in the South African debt capital markets to four investors in July and September this year.

The notes were rated "Aa2/AAA.za" by Moody's and were placed at a spread of Jibar (Johannesburg Interbank Agreed Rate) plus 200 bps for an all-in cost of funding, including the note margin, of 10.42%, it said.

The interest rate on this new debt has been fixed by way of an interest rate swap.

The notes have a tenor of 2.7 years and mature on May 7 2012.

This capital-raising represents the first "tap" by VIPS since its establishment in October 2005 and increases the total outstanding amount under the programme to R1.02 billion.

Chief executive Gerhard van Zyl said that due to the appreciation of property values within the company's portfolio and the escalation in rental income, no additional properties needed to be added to the portfolio to effect the transaction.

"We are particularly pleased with this result, which has allowed us to use VIPS and our existing property portfolio more effectively," he said.

Following the transaction, the company's loan to value and interest cover ratio remained well within the covenant levels of 65% and 1.55x respectively.

VIPS was the second commercial mortgage backed securitisation programme to be implemented in South Africa and was realised with the assistance of Absa.

These programmes have been used worldwide since the late nineties as an alternative to conventional bank loans and are a favoured instrument for reducing the cost of funding commercial property portfolios.

Mortgage-backed securitisation programmes currently constitute some 15% of European securitisation issuance and has been used to fund major projects such as London's Canary Wharf.

Vukile has a portfolio of 74 properties with a gross lettable area of 920 232m squared.

The portfolio has a gross asset value in excess of R4.53 billion.

At 11.05am, shares in Vukile were trading 15 cents, or 1.45% higher, at R10.50.

Last modified on Tuesday, 29 April 2014 11:38

Most Popular

10 SA REITs are among South Africa’s top listed companies

Nov 15, 2019
Estienne de Klerk SA REIT Chairman
South African REITs (real estate investment trusts) have once again excelled among the…

African Union for Housing Finance (AUHF) Cape Town declaration provides 5 point plan for african governments to address housing finance shortage

Nov 14, 2019
African Union of Housing Finance
Following the successful completion of their 35th Annual Conference, the members of the…

SA REIT publishes the second edition of its best practice recommendations for financial reporting

Nov 13, 2019
Bram Goossens
The SA REIT (Real Estate Investment Trust) sector has published the Second Edition of its…

Indluplace Properties boosts team to drive letting in 2020

Nov 13, 2019
Carel de_ Wit CEO Indluplace
Indluplace Properties, the first residential-focused REIT to list on the JSE, has…

Three frail care centres and a mix of residential and commercial properties on BidX1’s 4 December online property auction

Nov 14, 2019
Fontainebleau Welgelegen
Three frail care centres and a mix of residential and commercial properties on BidX1’s 4…

Please publish modules in offcanvas position.