Bond issue debut for Redefine

Posted On Tuesday, 06 September 2011 02:00 Published by eProp Commercial Property News
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Redefine has made its debut in the bond market with an issuance of R250 million 90 day commercial paper under its newly established R5 billion Domestic Medium Term Note Programme

Marc WainerThis issue, which is listed on the Interest Rate Market of the JSE, is the first in a planned series of issuances to be placed with institutional investors. The programme arrangers are Rand Merchant Bank and Absa Capital.

The issue was priced at an all in rate of 5,925% - 3 month Jibar of 5.575% plus 35bps. It was 2,2 times oversubscribed.
 
“While there was no immediate need for additional funding in Redefine, we have made our entry into the bond market to broaden our sources of debt funding and access funding on an attractive basis,” says Andrew Konig, Financial Director of Redefine Properties.  “We have kept our first issue relatively small so as to provide a smooth entry into this new initiative for Redefine. We anticipate that we will roll the initial tranche until June 2012 and then in due course consider larger, longer term issuances.”

Konig  says effective debt management is a key strategic imperative in a company like Redefine and the entry into the bond market gives Redefine additional flexibility and the ability to reduce reliance on bank funding allowing cost effective funding for  expansion and development  which will benefit  unit holders.

Redefine’s total current debt is approximately R8 billion at an overall current funding cost of around 9,3% per annum. “Clearly the bond market adds a valuable new dimension,” concludes  Konig.

Last modified on Thursday, 24 April 2014 09:36

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