Fitch Affirms Growthpoint Note Issuer Company (Pty) Limited's Series 1 CMBS Notes
Fitch Ratings-London-31 March 2010: Fitch Ratings has affirmed Growthpoint
Note Issuer Company (Pty) Limited's Series 1 CMBS notes and assigned
a Stable Outlook to all note classes. The rating actions are as follows:
ZAR537m class A1 notes due 2012 (ZAG000027459) affirmed at 'AAA(zaf)';
Outlook Stable
ZAR672m class A2 notes due 2013 (ZAG000030883) affirmed at 'AAA(zaf)';
Outlook Stable
ZAR125m class B1 notes due 2012 (ZAG000027442) affirmed at 'AA-(zaf)';
Outlook Stable
ZAR121m class B2 notes due 2013 (ZAG000030917) affirmed at 'AA-(zaf)';
Outlook Stable
ZAR88m class C1 notes due 2012 (ZAG000027434) affirmed at 'A-(zaf)';
Outlook Stable
ZAR93m class C2 notes due 2013 (ZAG000030909) affirmed at 'A-(zaf)';
Outlook Stable
ZAR55m class D1 notes due 2012 (ZAG000027426) affirmed at 'BBB(zaf)';
Outlook Stable
ZAR83m class D2 notes due 2013 (ZAG000030891) affirmed at 'BBB(zaf)';
Outlook Stable
The rating affirmations reflect the transaction's strong performance
since the last review. Rental income across the portfolio has increased
substantially, and this is reflected in an increase in the debt service
coverage ratio (DSCR) to 3.01x, from 2.36x at the time of last review,
and 1.93x at closing. On the back of the rental growth, the property
portfolio's aggregate market value (MV) has also increased significantly,
causing the transaction's loan-to-value ratio (LTV) to fall to 37.6%
from 50.4% at the time of last review and 59.9% at closing. This performance
has been achieved despite the downturn experienced by South Africa's
commercial property markets over the last two years.
The transaction comprises the first issues of Series 1 notes issued
as part of the issuer's ZAR5.0bn note programme, under which the issuer
can issue multiple series of notes that are either cross-collateralised
with some or all other notes outstanding, or fully segregated and secured
on a separate pool of assets. The first and second issues of Series
1 notes are secured by cross-collateralised and cross-defaulted loans
which are, themselves, secured on a single portfolio of 62 properties.
While the borrower has the flexibility to actively manage its property
portfolio, it must do so according to certain performance and stratification
criteria, as outlined by Fitch in a 4 July, 2006 comment, entitled "Growthpoint
Note Issuer Company Pty Ltd. - Second Notes Issue - Series 1".
Since the second note issuance in October 2006, there have not been
any significant changes to the portfolio other than the replacement
of a retail property valued at ZAR88.3m with two properties with a combined
value of ZAR100.3m in Q308.
Approximately 46.6% of the underlying property portfolio by MV comprises
office properties, while 33.1% comprises shopping centres and retail
warehouses and 14.8% is industrial property. Over 88% of the portfolio
is located in established property markets around Johannesburg, Cape
Town and Pretoria.
Fitch will continue to monitor the performance of the transaction. A
performance update report can be found on the agency's website at www.fitchratings.com.
Fitch's criteria for EMEA CMBS surveillance was used to analyse the
quality of the underlying commercial loans. Applicable criteria, 'Criteria
for European CMBS Surveillance (Europe CMBS)', dated 12 November, 2008
and 'Global Structured Finance Rating Criteria', dated September 30,
2009, are available on www.fitchratings.com
Further information on Fitch's EMEA structured finance offering can
be found in "EMEA Structured Finance Snapshot", which is available
at www.fitchratings.com. The Snapshot consolidates and highlights the
key research and commentary produced by the agency's EMEA structured
finance group and includes previously unpublished Fitch data and multimedia
content that will be updated each quarter.
Contacts: Daniel York, London, Tel: +44 20 7417 4216; Saavan Gatfield,
Tel: +44 20 7682 7426.
Media Relations: Julian Dennison, London, Tel: +44 020 7682 7480, Email:
julian.dennison@fitchratings.com.
Note to Editors: Fitch's National ratings provide a relative measure
of creditworthiness for rated entities in countries with relatively
low international sovereign ratings and where there is demand for such
ratings. The best risk within a country is rated 'AAA' and other credits
are rated only relative to this risk. National ratings are designed
for use mainly by local investors in local markets and are signified
by the addition of an identifier for the country concerned, such as
'AAA(zaf)' for National ratings in South Africa. Specific letter grades
are not therefore internationally comparable.
Additional information is available at www.fitchratings.com.
Related Research:
Criteria for European CMBS Surveillance (Europe CMBS)
Global Structured Finance Rating Criteria
EMEA Structured Finance Snapshot - February 2010 (Multimedia) - Amended
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