Growthpoint goes greener to attract specialised investors
The listed property fund will use R1.1bn green bonds issue to fund its environment initiatives
Growthpoint Properties has become the first South African company to issue a green bond programme on the JSE as it looks to attract specialised investors wanting exposure to environmentally friendly projects. Green bonds raise money that is allocated for funding projects resulting in positive environmental and climate benefits.
The listed property fund owns various green buildings and implements varied green initiatives across its portfolio.
"The R1.1bn green bonds issued by Growthpoint would be used to fund Growthpoint’s green buildings and green initiatives," said Dirkje Bouma, corporate treasurer at Growthpoint.
The Growthpoint green bonds, for terms of five, seven and 10 years, were issued and listed on the JSE last Friday. These new bonds are intended to give more choice to investors who in the past have only been able to invest in municipal green bonds such as those launched by the City of Cape Town.
The bonds form part of Growthpoint’s R20bn domestic medium-term note programme. Growthpoint has a national scale Aaa.za Moody’s rating, with many banks opting to hold Growthpoint paper as high-quality liquid assets, according to the CEO Norbert Sasse. The green bonds are priced at 139 basis points above the three-month Johannesburg interbank average rate (Jibar) for the five-year term. They are priced at 169 basis points above Jibar for the seven-year term and at 200 basis points above Jibar for the 10-year term.
"Growthpoint’s successful green bond proves there are benefits in committing to promoting SA’s climate-resilient future," JSE capital markets director Donna Nemer said.
Evan Robins, a fund manager at Old Mutual Investment Group, said Growthpoint had received "a good price for this bond and they will pay an attractive interest rate, showing the market will support social responsibility".