August 25 2022, 12:00 (SAST)

Vukile concludes oversubscribed R767m unsecured bond issue

Vukile Property Fund (JSE: VKE) has issued R767m of senior unsecured corporate bonds with three- and five-year maturities. Indicating significant market interest, the initial target issuance size of R500m was 4.6 times oversubscribed, attracting bids of R2.3bn, and the issue was increased to R767m.

Three-year notes of R232m were placed at a margin of 139bps, and five-year notes of R535m were placed at a margin of 159bps, both favourably priced at levels better than guidance.

“This very successful issuance garnered significant traction and produced an excellent outcome that signals the market’s positive view of Vukile’s business model, balance sheet and defensive cash flows,” says Laurence Rapp, CEO of Vukile.

Rand Merchant Bank, a division of First Rand Bank, acted as sole lead arranger. “The robust investor demand for the auction and the bonds’ competitive pricing reflects Vukile’s high credit quality,” says Nick Tunnicliffe of RMB.

In July 2022, GCR Ratings upgraded Vukile’s national scale long-term issuer rating to AA(za) and affirmed its national scale short-term issuer rating at A1+(za), with a stable outlook.

Vukile is a specialist retail REIT with assets of R33bn in South Africa (46%) and Spain (54%) through its 89.6% held Madrid-listed subsidiary Castellana Properties Socimi.

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