Growthpoint Properties, the JSE's largest property group, issued bond notes worth R1,566bn on the Bond Exchange of SA on Friday.

The bond issue, the largest of its kind in SA and the fourth issue of notes under Growthpoint's commercial-mortgage-backed securitisation programme, will be used to pay off old debt and fund new acquisitions.

This brings the total value of the notes issued under the programme since last November to R4,3bn.

Growthpoint CEO Norbert Sasse said the notes included AAA-, AA- and A-rated notes. The ratings were given by a rating agency according to the risks the notes offered. AAA-rated notes were the safest while AA-rated notes and A-notes carried more risk, said Sasse.

The average weighted margin of the notes including the cost of the transaction came to about 74 basis points over the Johannesburg Inter-Bank Agreed Rate. "We raised R1,566bn today and we are using R850m to settle old existing debt where we're still paying a 200 basis points margin. The balance of about R700m will be used to settle obligations on new acquisitions we?ve made and other acquisitions in the pipeline," said Sasse.

One new acquisition which would be settled was Growthpoint's property transaction with Business Connexion. In June Business Connexion said it was selling eight properties worth R379m to Growthpoint.

The buildings are classified as Grade-A commercial properties and are in Midrand, Pretoria, Durban, Cape Town and Port Elizabeth.

Business Connexion said it sold them as holding property was not its core business, and would rent them back from Growthpoint.

Business Day