GrowthPoint Properties has successfully raised R1.8bn through a senior unsecured bond issuance after attracting bids of more than R6.5bn in a heavily oversubscribed auction.
The issue, which was initially targeted at between R1bn and R1.5bn, rose amid strong investor demand and settled at the most favorable margin ever achieved by the company in a bond auction.
The bonds were issued over three tranches, all priced at record-low margins, underscoring investor confidence in GrowthPoint's credit quality and long-term strategy.
Three-year bonds of R579m are priced at Zaronia +90bps (published credit adjustment spread implies Jibar equivalent margin of +74bps), five-year bonds of R425m are priced at Zaronia +100bps (Jibar +84bps) and seven-year bonds of R796m are at Zaronia +125bps (Jibar +109bps).
Jibar's weighted average margin of +92bps is significantly lower than current margins, reducing Growthpoint's cost of capital. Highlighting the significant improvement in pricing over the three-year period, the five-year tranche achieved margin compression of 65bps compared to Growthpoint's five-year bond issued in 2023 at Jibar +150bps.
“This is an excellent result,” says Estienne de Klerk, SA Chief Executive Officer of Growthpoint Properties. “It is particularly pleasing to achieve strong investor support and record-tight margins, especially given the current global geopolitical and local market headwinds.”
The issue attracted 26 individual investors, the highest seen for a corporate auction in the local market this year, reflecting the market's continued confidence and trust in Growthpoint.
Investor confidence increases
GrowthPoint values its long-term partnership with Absa Bank Limited and Standard Bank of South Africa Limited, whose dedication and deep capital markets expertise as joint arrangers was instrumental in completing this landmark transaction.
The strong auction result follows the recent affirmation of Growthpoint's credit rating through May 2026.
Moody's Ratings affirmed the corporate family rating at Ba2 and raised the outlook to positive, in line with SA's sovereign rating. Moody's also upgraded GrowthPoint's national long-term rating to AAA(za) from AA1(za).
Fitch has affirmed GrowthPoint's global rating of BB+ and national rating of AAA.za, driven by the resilience of GrowthPoint's portfolio to economic uncertainties and geopolitical tensions, its stable financial structure and improving performance and occupancy across its SA portfolio.
GrowthPoint benefits from diverse funding platforms. It maintains a ZAR30bn Domestic Medium Term Note (DMTN) program listed on the JSE, providing flexible and efficient access to debt capital markets. The company's funding base is well diversified across multiple banks and institutional lenders. GrowthPoint also has access to significant undrawn committed revolving credit facilities of R5.7bn to ensure strong liquidity.
“This bond issuance confirms GrowthPoint's strong access to the debt capital markets as an active issuer. It reflects our investors' confidence in GrowthPoint's credit quality and their confidence in our current business proposition and strategic long-term direction. We deeply value their confidence,” De Klerk concluded.
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