Announcements Corporate Rating Alerts

GCR withdraws ratings assigned to Accelerate’s Senior Secured APF12 Note, affirms the ratings on the remaining Notes

Rating Action

Johannesburg, 07 October 2021 – GCR Ratings (“GCR”) has withdrawn the long-term issue credit ratings assigned to the APF12 Note issued by Accelerate Property Fund Limited (“Accelerate”) following its full capital redemption.

Concurrently, GCR has affirmed the long-term issue ratings of A-(ZA)(EL) assigned to the existing Senior Secured Notes (“the Notes”). A Rating Watch Negative remains on all ratings.

Rated Entity / Issue Rating class Rating scale Rating* Outlook / Watch
Senior Secured APF04 Notes Long Term Issue National A-(ZA)(EL) Rating Watch Negative
Senior Secured APF06 Notes Long Term Issue National A-(ZA)(EL) Rating Watch Negative
Senior Secured APF07 Notes Long Term Issue National A-(ZA)(EL) Rating Watch Negative
Senior Secured APF09 Notes Long Term Issue National A-(ZA)(EL) Rating Watch Negative
Senior Secured APF10 Notes Long Term Issue National A-(ZA)(EL) Rating Watch Negative
Senior Secured APF11 Notes Long Term Issue National A-(ZA)(EL) Rating Watch Negative
Senior Secured APF12 Notes Long Term Issue National WD
Senior Secured APF14 Notes Long Term Issue National A-(ZA)(EL) Rating Watch Negative
Senior Secured APF15 Notes Long Term Issue National A-(ZA)(EL) Rating Watch Negative
Senior Secured APF16 Notes Long Term Issue National A-(ZA)(EL) Rating Watch Negative

*The Senior Secured Note ratings are based on an estimate of the expected loss in the event of an issuer default and are a function of the estimated probability of default of the issuer and the potential losses that may be incurred. As such, these ratings carry an “(EL)” suffix. The expected loss ratings assigned to the notes issued therefore differs from the ‘BBB(ZA)’ long-term senior unsecured credit rating of the Issuer.

Rating Rationale

The ratings on the Notes is derived by notching up from the national scale long term issuer rating assigned to Accelerate Property Fund Limited (“Accelerate”, “the Issuer”) to BBB-(ZA), Rating Watch Negative. GCR’s modelled assumptions for the Senior Secured Note indicate that the stressed recovery rate has declined to 79.1%, from 81.6% at the August 2021 review. Nevertheless, a rating uplift of three national scale notches was still deemed to be appropriate for the Senior Secured Notes, on the expectation that recoveries will improve following the sale of non-core assets.

Outlook Statement

The Rating Watch Negative reflects the potential for additional downgrades to the Issuer if the proposed assets sales and the refinancing activity are not timeously concluded.

Rating Triggers

A downgrade of the issuer ratings would necessarily translate to a downgrade of the ‘EL’ ratings. Additionally, if a continuous deterioration in recovery prospects on the EL ratings is observed, this could also result in downward rating pressure. The rating outlook could return to stable if the Issuers’ operating performance stablises, alongside the conclusion of the asset sales and refinancing agreements.

Analytical Contacts

Primary analyst Eyal Shevel Sector Head: Corporate Ratings
Johannesburg, ZA Shevel@GCRratings.com +27 11 784 1771
Committee chair Sheri Morgan Senior Analyst: Corporate Ratings
Johannesburg, ZA Morgan@GCRratings.com +27 11 784 1771

Related Criteria and Research

Criteria for the GCR Ratings Framework, May 2019
Criteria for Rating Real Estate Investment Trusts and Other Commercial Property Companies, May 2019
Criteria for Secured Bond Expected Loss Credit Ratings, July 2021
GCR’s Country Risk Score report, published October 2021
GCR’s SA Sector Risk Score report, published April 2021
Accelerate Property Fund Limited Rating Announcement, 25 August 2021

Ratings History

Accelerate Property Fund Limited

Rating class Review Rating scale Rating Outlook/Watch Date
Long term Issuer Initial National BBB+(ZA) Stable Outlook Feb 2014
Short Term Issuer Initial National A2(ZA)
Long term Issuer Last National BBB-(ZA) Rating Watch

Negative

Aug 2021
Short Term Issuer Last National A3(ZA)
Stock Code Review Rating scale Rating* Outlook/Watch Date
APF04 Initial National AA-(ZA) Stable Oct 2016
Last National A(ZA)(EL) Rating Watch Negative Aug 2021
APF06 Initial National AA-(ZA) Stable Aug 2017
Last National A(ZA)(EL) Rating Watch Negative Aug 2021
APF07 Initial National AA-(ZA) Stable Jun 2018
Last National A(ZA)(EL) Rating Watch Negative Aug 2021
APF09 Initial National AA-(ZA) Stable Jul 2018
Last National A(ZA)(EL) Rating Watch Negative Aug 2021
APF10 Initial National AA-(ZA)(EL) Stable Oct 2019
Last National A(ZA)(EL) Rating Watch Negative Aug 2021
APF11 Initial National AA-(ZA)(EL) Stable Oct 2019
Last National A(ZA)(EL) Rating Watch Negative Aug 2021
APF12 Initial National A(ZA)(EL) Negative Aug 2020
Last National A(ZA)(EL) Rating Watch Negative Aug 2021
APF14 Initial National A(ZA)(EL) Negative Sep 2020
Last National A(ZA)(EL) Rating Watch Negative Aug 2021
APF15 Initial National A(ZA)(EL) Negative Feb 2021
Last National A(ZA)(EL) Rating Watch Negative Aug 2021
APF16 Initial National A(ZA)(EL) Negative Jun 2021
Last National A(ZA)(EL) Rating Watch Negative Aug 2021

SALIENT POINTS OF ACCORDED RATINGS

GCR affirms that a.) no part of the ratings process was influenced by any other business activities of the credit rating agency; b.) the ratings were based solely on the merits of the rated entity, security or financial instrument being rated; and c.) such ratings were an independent evaluation of the risks and merits of the rated entity, security or financial instrument.

The credit ratings have been disclosed to Accelerate Property Fund Limited. The ratings above were solicited by, or on behalf of, the rated entity, and therefore, GCR has been compensated for the provision of the ratings.

Accelerate Property Fund Limited participated in the rating process via face-to-face management meetings, tele-conferences and other written correspondence. Furthermore, the quality of information received was considered adequate and has been independently verified where possible.



ALL GCR CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS, TERMS OF USE OF SUCH RATINGS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS, TERMS OF USE AND DISCLAIMERS BY FOLLOWING THIS LINK:HTTP://GCRRATINGS.COM. IN ADDITION, RATING SCALES AND DEFINITIONS ARE AVAILABLE ON GCR’S PUBLIC WEB SITE AT WWW.GCRRATINGS.COM/RATING_INFORMATION. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. GCR's CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THIS SITE.

CREDIT RATINGS ISSUED AND RESEARCH PUBLICATIONS PUBLISHED BY GCR, ARE GCR’S OPINIONS, AS AT THE DATE OF ISSUE OR PUBLICATION THEREOF, OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. GCR DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL AND/OR FINANCIAL OBLIGATIONS AS THEY BECOME DUE. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: FRAUD, MARKET LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND GCR’S OPINIONS INCLUDED IN GCR’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND GCR’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND GCR’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL OR HOLD PARTICULAR SECURITIES. NEITHER GCR’S CREDIT RATINGS, NOR ITS PUBLICATIONS, COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. GCR ISSUES ITS CREDIT RATINGS AND PUBLISHES GCR’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING OR SALE.

Copyright © 2022 GCR INFORMATION PUBLISHED BY GCR MAY NOT BE COPIED OR OTHERWISE REPRODUCED OR DISCLOSED, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT GCR’S PRIOR WRITTEN CONSENT. Credit ratings are solicited by, or on behalf of, the issuer of the instrument in respect of which the rating is issued, and GCR is compensated for the provision of these ratings. Information sources used to prepare the ratings are set out in each credit rating report and/or rating notification and include the following: parties involved in the ratings and public information. All information used to prepare the ratings is obtained by GCR from sources reasonably believed by it to be accurate and reliable. Although GCR will at all times use its best efforts and practices to ensure that the information it relies on is accurate at the time, GCR does not provide any warranty in respect of, nor is it otherwise responsible for, the accurateness of such information.GCR adopts all reasonable measures to ensure that the information it uses in assigning a credit rating is of sufficient quality and that such information is obtained from sources that GCR, acting reasonably, considers to be reliable, including, when appropriate, independent third-party sources. However, GCR cannot in every instance independently verify or validate information received in the rating process. Under no circumstances shall GCR have any liability to any person or entity for (a) any loss or damage suffered by such person or entity caused by, resulting from, or relating to, any error made by GCR, whether negligently (including gross negligence) or otherwise, or other circumstance or contingency outside the control of GCR or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits) suffered by such person or entity, as a result of the use of or inability to use any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained in each credit rating report and/or rating notification are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained in each credit rating report and/or rating notification must make its own study and evaluation of each security it may consider purchasing, holding or selling. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY GCR IN ANY FORM OR MANNER WHATSOEVER.