Standard Bank has successfully raised R700 million for Capital Property Fund, the fourth-largest property fund listed on the JSE, through its first bond issue under its R2 billion Domestic Medium Term Note Programme.

The issue was oversubscribed, receiving in excess of R1 billion in bids. Standard Bank was the sole lead arranger and manager in the bond issuance.

Capital Property Fund, which is focused on the industrial and commercial property sectors, will use the funds raised to refinance its maturing debt.

Andrew Costa, head debt capital markets at Standard Bank corporate and investment banking, said the bond issue follows a growing trend by property companies to tap into capital markets as they seek to diversify their sources of funding that are attractively priced.

"Capital is an important client of Standard Bank and we are delighted to take them to capital markets.

"Our first issuance for Capital Property Fund signifies growth in a reasonably new emerging asset class that is coming to market," said Costa.

"It is a resounding success to raise an amount of this size in this volatile market. We believe that investors take comfort in the quality of the asset pool and low loan-to-value ratios making this an attractive offering to participate in."

The successful issue demonstrates the depth and liquidity of the local market and is an indication of strong demand from a broad range of institutional investors interested in the debt capital markets as a source of assets.

"This is still a challenging market but the fact that the issue was oversubscribed shows that the market continues to have appetite for credit where they see value. We are very satisfied with this performance.

"The breadth and spread of investors is a good vote of confidence in Capital Property Fund.

"We are pleased that Standard Bank's understanding of the capital markets has helped to make our first issue a success," said Capital Property Fund Director Barry Stuhler.

Source: I-Net Bridge