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Growthpoint - Placement Of Second Tranche Of Growthpoint"s Commercial Mortgage

Release Date: 26/06/2006 15:32
Code(s): GRT
Wrap Text

Growthpoint - Placement Of Second Tranche Of Growthpoint"s Commercial Mortgage Backed Securitisation Notes GROWTHPOINT PROPERTIES LIMITED (Incorporated in the Republic of South Africa) Registration number 1987 / 004988 / 06 ISIN: ZAE000037669 Share code: GRT ("Growthpoint" or "the company") PLACEMENT OF SECOND TRANCHE OF GROWTHPOINT"S COMMERCIAL MORTGAGE BACKED SECURITISATION NOTES 1. Introduction Investec Bank Limited is authorised to announce that Growthpoint has successfully placed the largest commercial mortgage backed bond issue to date of R969 million, in a book build exercise concluded on Friday, 23 June 2006, in the second tranche of its R5 billion Commercial Mortgage Backed Securitisation ("CMBS") programme announced in 10 October 2005. The pricing over the 3 month JIBAR rate achieved on the 5 year term notes was as follows: - AAA.zaf 0.35% over 3-M JIBAR - AA -.zaf 0.42% over 3-M JIBAR - A-.zaf 0.71% over 3-M JIBAR; and - BBB.zaf 1.05% over 3-M JIBAR The weighted average price of the issue is 0.45% over the 3 month JIBAR rate and an all in fixed rate for the 5 year term of the bonds of 8.48% compared with 0.47% over the 3 month JABAR rate and an all in rate of 9.34% in the first tranche that was issued in November 2005. The better spread in the second tranche relative to the first was achieved by taking out forward starting fixes in December 2005 and February 2006, when long term rates were substantially lower than current levels. In addition, the upfront and annual running costs of the second tranche are significantly lower than were applicable to Growthpoint"s first CMBS issue of R805 million in November 2005. Notwithstanding the above factors, the spread of 45 basis points over the 3 month JIBAR is a good margin given the current volatility in the markets. The bonds will be listed on the Bond Exchange of South Africa at the end of June 2006. The bonds are secured by 25 prime investment properties across South Africa valued at over R1,7 billion, with a loan to value of approximately 60%. 21 of the properties were purchased in Growthpoint"s most recent acquisition from Tresso with the remaining four also being recent acquisitions including City Mall Klerksdorp, the Auditor General building in Pretoria, Healthcare Office Park in Woodmead and a state of the art head office, sales, assembly and distribution facility of Rectron, a leading computer components distributor in Southern Africa. 2. Rationale and Proposed Benefits The proposed benefits of Growthpoint"s CMBS programme include: - lower average cost of borrowings; - diversification of borrowing sources; - increased competitive advantage of Growthpoint to make value enhancing acquisitions; and - increased distributions to Growthpoint linked unit holders. The net proceeds of the issue will be used to settle the bridging finance that was taken to fund the Tresso and other recent acquisitions including those mentioned above. For and on behalf of the board Growthpoint Properties Limited Sandton 26 June 2006 Investment bank Sponsor (Investec Corporate Finance) (Investec Bank) Lead Arranger and Manager Attorneys to Growthpoint (Investec Treasury & Specialised Finance) (Jowell Glyn & Marais) Attorneys to the Arranger and Issuer (Webber Wentzel Bowens) Date: 26/06/2006 03:32:04 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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