Freestone to issue new-look bond notes

Posted On Friday, 05 May 2006 02:00 Published by eProp Commercial Property News
Rate this item
(0 votes)

Listed property loan stock company Freestone Property Holdings is introducing a commercial mortgage-backed securitisation programme to slash debt funding costs and take advantage of the more competitive interest margins in the capital markets.

Michael AitkenFreestone executive director Michael Aitken said the commercial mortgage-backed securitisation funding structure (CMBS) had been engineered by Rand Merchant Bank (RMB).

Aitken said Freestone was hoping to issue bond notes of about R500m on the Bond Exchange of SA next month. These would be secured by property worth about R900m.

Freestone was also creating a special purpose vehicle to hold the properties against which the notes would be issued. Freestone’s property portfolio is worth just under R1,4bn.

The company said the capital raised would finance the “lion’s share of Freestone’s borrowings, which amounted to R630m at December 2005”.

“We think the CMBS structure is going to gain popularity in SA both from the point of view of property companies wanting to raise a cheaper form of finance and also for CMBS investors for whom it is a diversifier,” said Aitken.

Indications were there was strong demand for bond notes.

RMB securitisation specialist Damian Botoulas said that the bond notes, which mature in 2011, were “an attractive investment opportunity for institutional investors ”.

Last modified on Tuesday, 06 May 2014 13:32

Most Popular

GMI Property Group adds a New Mall to its Stable: Bronkhorstspruit Mall

Jul 21, 2022
GMI Properties Group announces the development of the much-anticipated Bronkhorstspruit…

Equites Property Fund and Mabel conclude B-BBEE transaction

Jul 21, 2022
Andrea Taverna-Turisan
The JSE listed specialist logistics property fund, Equites, today officially announced…

The growing take-away and fast food, and food delivery, culture

Jul 20, 2022
Restaurant and Take-Aways data for May 2022
Restaurant and Take-Aways data for May 2022 points to “solid but slowing” growth in…

Broad commercial property market softening expected due to ongoing and more rapid rate of interest rate hiking

Jul 21, 2022
Default Image
The still-bigger 75 basis point hike announced this afternoon, after the previous 125…

The rapidly rising cost of living is reflecting in residential rentals

Jul 21, 2022
TPN Graph-Rental Demand
Demand for residential rental properties saw some recovery in the first quarter of 2022…

Please publish modules in offcanvas position.