GROWTHPOINT Properties has issued a R1 billion senior unsecured bond with a 10-year maturity.
The offering came after strong investor interest in long-term Growthpoint debt, which the sole arranger, Standard Bank, successfully executed as a private placement of R1 billion.
The 10-year note was placed at a margin of 185bps above three-month JIBAR, the most favourable pricing achieved in a number of years. The issue attracted multiple investors, reflecting the market’s continued trust and confidence in Growthpoint.
“We are delighted with the strong support received from our investor base and the success of the long-dated debt issuance, especially given the current global turmoil and local market challenges,” says Estienne de Klerk, SA CEO of Growthpoint Properties.
“In the last 12 months, Growthpoint has managed to raise close to R2.5 billion of 10-year funding in the listed bond market at compressing spreads. This demonstrates the strength of Growthpoint’s credit quality and the long tenure of the bonds is a vote of confidence from investors in the future of the business,” says Carl Wiesner, Head, Syndicate (South Africa) at Standard Bank Group, Debt Capital Markets.
Growthpoint has both Fitch and Moody’s credit ratings. Its Fitch global scale rating is BB+ and national scale rating is AAA.za and its Moody’s global scale rating is Ba2 and national scale rating is Aa1.za
Its latest issuance reaffirms Growthpoint’s robust access to debt capital markets. Growthpoint, being an active issuer in the debt capital markets, also recently won the Bonds, Loans & ESG Capital Markets Africa Award 2024 for Real Estate Finance Deal of the Year for its R910m bond issue in October 2023, for which Standard Bank was also the book-runner.
The company also successfully privately placed a R1bn Green Bond for 10 (R650m) and seven years (R350m). A portion of the proceeds of the Green Bond will be used to finance renewable energy projects for its property portfolio.
Growthpoint signs landmark wind-hydro-solar PPA deal
Growthpoint recently signed a landmark Power Purchase Agreement (PPA) with Etana Energy for 195GWh of renewable energy a year, representing 32% of its total current annual electricity consumption (612GWhs in FY23) in addition to its long-standing investment in solar plants at its properties, furthering its climate commitment of being carbon neutral by 2050.
he deal has set in motion the country’s first multi-jurisdiction, multi-building, multi-source renewable energy wheeling arrangement, and will enable Growthpoint’s tenants to access green energy and reduce their carbon footprint.
Through this agreement, Etana will cover 70% of the power consumed by Growthpoint’s participating buildings, and in some buildings, Growthpoint will even be able to provide its tenants with the ability to purchase 100% renewable energy and actively drive carbon reduction.
The wheeled renewable energy will mainly consist of wind, with a smaller component of hydro and large-scale solar electricity. The combination of generation sources allows for a high coverage of Growthpoint’s energy use, as electricity is generated throughout the day and night.
