Hyprop raises R4 billion in three months
JSE specialist shopping centre REIT, Hyprop, has successfully refinanced/raised R4 billion in only three months since December 2018, effectively addressing the concern of Moody’s investor Services Inc. (Moody’s) that the group may be challenged to refinance its R5 billion of debt falling due in the next 18 months. Moody’s cited the concern in support of its decisions, in February 2019, to downgrade Hyprop’s credit and issuer rating.
Hyprop CEO, Morne Wilken, says the group had been confident from the outset of successfully raising or refinancing the R5 billion referenced by Moody’s. “In light of Hyprop’s historical track record of extensive access to debt funding and our established relationship with lenders, the group did not share Moody’s concern.”
In March 2019 Hyprop issued two new unsecured five-year notes under its Domestic Medium Term Note Programme, raising R500 million, which Wilken says has been earmarked for “redeeming a Hyprop bond maturing in July, funding improved entertainment offerings at our malls and financing new tenant fit-outs following Edcon’s reduction of floorspace.” Hyprop’s first capital project for 2019 will be The Ratanga Family Entertainment Centre at Canal Walk, which will revive parts of the former successful Ratanga Junction and introduce new world-class rides just outside of the centre’s food court.
Hyprop has also successfully refinanced over EUR210 million of loans in Hystead, which houses its South-Eastern Europe portfolio. Wilken adds that the interest is expected to be in line with the average Euro cost of borrowing of such loans. Further, the group is making good progress on refinancing its Dollar-denominated debt in its sub Saharan Africa portfolio and certain local bonds due for redemption later this year.
Wilken concludes: “Hyprop’s executive will keep a close watch on global retail trends and allocate capital appropriately to projects that will keep our malls relevant. From a debt perspective, we remain confident of our ability to continue refinancing our loans and raising capital as necessary, based on our historical success in doing so.”