Johannesburg, 31 January 2014 — Global Credit Ratings has affirmed the final, public long term rating of ‘AA-(ZA)’ with a ‘Stable’ outlook on the R450m Senior Secured Notes (the ‘Notes’) issued by Investec Property Fund Limited (‘IPF’) under IPF’s R3bn DMTN Programme established in April 2012. The notes were issued on the 13 April
ZAR 134,000,000 senior secured notes, stock code IPF01, coupon 3M Jibar + 1.40%, due 13 April 2015.
ZAR 40,000,000 senior secured notes, stock code IPF02, coupon 3M Jibar + 1.55%, due 13 April 2016.
ZAR 50,000,000 senior secured notes, stock code IPF03, coupon 3M Jibar + 1.65%, due 13 April 2017
ZAR 226,000,000 senior secured notes, stock code IPF06, coupon 8.8%, due 13 April 2017.
Global Credit Ratings has accorded the above credit rating(s) to Investec Property Fund’s Senior Secured Notes based on the following key criteria:
IPF is a limited liability Real Estate Investment Trust (‘REIT’) whose mandate is to procure and manage income generative real estate with potential for capital gain. Listed on the JSE in April 2011, the fund owns a range of retail, commercial and industrial properties.
The rating of the Notes was derived by applying a notching up approach, starting from the long term senior unsecured corporate credit rating of the Issuer. Based on the fundamentals and prospects of IPF, GCR upgraded the IPF’s Credit Ratings in the long and shorty term respectively to ‘A-(ZA)/A1(ZA)’ from ‘BBB+(ZA)/A2(ZA)’ on a national scale in November 2012. With regards to the notes, a rating uplift of 3 national scale notches was deemed appropriate for these particular Notes, given the ‘Excellent Recovery Prospects’ of the Notes. GCR has thus affirmed the final, public rating of AA-(ZA) accorded to the Notes with a ‘Stable’ outlook.
For more information on the Transaction and specific details of the Senior Secured Notes, please refer to the surveillance report entitled “Investec Property Fund Limited”, to be published in January 2014. The surveillance report will be available to subscribers of GCR’s structured finance subscription service. GCR analysed the Transaction by applying its Criteria for Rating Property Funds and its Global Structurally Enhanced Corporate Bonds Rating. The criteria reports are available for download on the GCR website.
NATIONAL SCALE RATINGS HISTORY
Initial rating (April/2012)
Secured Bond rating: A(ZA)
Last rating (April/2013)
Secured Bond rating: AA-(ZA)
Mark Vrdoljak/Tinashe Nyautore
+27 11 784 1771
Head of Structured Finance
+27 11 784 1771
APPLICABLE METHODOLOGIES AND RELATED RESEARCH
Global Structurally Enhanced Corporate Bonds Rating Criteria – Oct, 2013
Criteria for Rating Property Funds
IPF Property Fund R450m Secured Notes New Issuance Report (April’11)
IPF Corporate Rating Report (Aug’13)
RATING LIMITATIONS AND DISCLAIMERS
ALL GCR’S CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://GLOBALRATINGS.NET/UNDERSTANDING-RATINGS. IN ADDITION, GCR’S RATING SCALES AND DEFINITIONS ARE ALSO AVAILABLE FOR DOWNLOAD AT THE FOLLOWING LINK: HTTP://GLOBALRATINGS.NET/RATINGS-INFO/RATING-SCALES-DEFINITIONS. GCR’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, PUBLICATION TERMS AND CONDITIONS AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE AT HTTP://GLOBALRATINGS.NET.
SALIENT FEATURES OF ACCORDED RATINGS
GCR affirms that a.) no part of the rating was influenced by any other business activities of the credit rating agency; b.) the rating was based solely on the merits of the rated entity, security or financial instrument being rated; c.) such rating was an independent evaluation of the risks and merits of the rated entity, security or financial instrument; and d.) the validity of the rating is for a maximum of 12 months, or earlier as indicated by the applicable credit rating document. The Issuer and the Arranger participated in the rating process via face-to-face meetings, teleconferences and other written correspondence. Furthermore, the quality of info received was considered adequate and has been independently verified where possible.
The credit rating/s has been disclosed to the Issuer and the Arranger with no contestation of the rating.
The information received from the Arranger and other reliable third parties to accord the credit ratings included the latest Issuer’s audited annual financial statements
for the year ending March 2013; an overview of the Issuer’s property portfolio as at 30 September 2013; management accounts for the period ended 31 October 2013; a performance forecast for the period beginning March 2013 and ending March 2018; the insurance policies covering the ceded properties; the applicable Open Market Valuation Reports; and the relevant transaction documents together with the relevant legal and tax opinions
The ratings above were solicited by, or on behalf of, the rated client, and therefore, GCR has been compensated for the provision of the ratings.