Nick Wilson

Property Correspondent

THERE has been strong demand for the first issue of bond notes in listed property loan stock company Growthpoint’s R5bn commercial mortgage-backed securitisation programme.

There was strong demand for the first issue of R805m worth of notes, which were 2,3 times oversubscribed by investors. The notes were launched on the Bond Exchange SA on Wednesday.

The initial issue was secured by 36 investment properties valued at R1,34bn.

The notes also achieved record pricing against other property securitisation programmes in SA, with the weighted average credit margin of only 0,47% over the three-month Johannesburg Interbank Agreed Rate (Jibar), relative to current bank rates of about 2% over the three-month Jibar.

Growthpoint CEO Norbert Sasse said the programme would reduce the cost of borrowings, fund Growthpoint’s growth requirements and lower its reliance on continued bank funding lines.

Sasse said Growthpoint’s saving on debt costs with this issue of bond notes was R9,3m a year.

Nick Job, head of Investec Debt Capital Markets, the lead arranger and manager of Growthpoint’s securitisation programme, said the savings on future bond note issues would be greater because no set-up costs would be incurred again.