Emira Property Fund : EMII - Financial Covenants Notification

EMIRA PROPERTY FUND LIMITED Incorporated in the Republic of South Africa (Registration number 2014/130842/06) Company code: EMII

(Approved as a REIT by the JSE) ("Emira" or "the Issuer")

FINANCIAL COVENANTS NOTIFICATION

Noteholders are advised of the following financial covenants report.

The Issuer's financial covenants requirements, applicable to the listed notes, is as follows:

• Loan to Value Ratio ("LTV ratio") does not exceed 50% for the Emira Property Fund Group ("the Group"). As per the Programme Memorandum the LTV is calculated as follows:
• • Loan to Value Ratio means the ratio between the Total Debt of the Group and the Property Portfolio Value;
  • Total Debt means all interest-bearing borrowings (in whichever form and including, without limitation, note issuances or any other instrument evidencing Financial indebtedness) of the Borrower and derivative liabilities net of derivative assets excluding trade creditors and other payables and tax payable, less cash and cash equivalents, (each calculated on the basis of the Emira Property Fund Group financial statements, where:
    Financial Indebtedness means any indebtedness, including for or in respect of:
  • 1. moneys borrowed or credit granted;
    2. any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;
    3. any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
    4. the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with IFRS, be treated as a finance or capital lease;
    5. receivables sold or discounted (other than any receivables to the extent they are sold on a non recourse basis);
    6. any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition having the commercial effect of a borrowing;
    7. any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close out of that derivative transaction, that amount) shall be taken into account);
    8. any amount raised by the issue of shares which are redeemable;
    9. any counter indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
    10. the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in a) to i) above;
  • Property Portfolio Value means the aggregate of:
  • 1. the Open Market Value of Investment Property;
    2. the value of the equity accounted property investments of the Emira Property Fund Group in associates and joint ventures;
    3. the market value of listed securities owned by the Emira Property Fund Group in companies, the nature of business of which is property investment; and
    4. the market value of loans receivable,

in each case, determined with reference to the interim and audited financial statements

• • Investment Property means all the immovable properties owned by the Group from time to time;
  • Open Market Value means in respect of Investment Property, the annual property valuation undertaken at the instance of the Issuer in regard to all Investment Property, which in relation to a minimum of 33.3% (thirty three point three percent) of Investment Property by number, shall be undertaken by a Valuer or Valuers appointed by the Issuer, provided that in respect of any 3 (three) year period all Investment Property will have been valued by a Valuer or Valuers; and
  • Property Portfolio means all the immovable properties owned by the Group from time to time;
• Loan to Valuation Ratio (Group 1) ("LTV Group 1 ratio") of the Group 1 Property Portfolio does not exceed 60% at any time, based on the most recent Open Market Valuation. As per the Applicable Pricing Supplements the LTV Group 1 ratio is calculated as follows:
• • LTV Group 1 ratio means at any time, in respect of the Group 1 Notes, the ratio as expressed as follows:
    LTV Group 1 ratio = L divided by V where:
    L = the aggregate Outstanding Principal Amount of the Group 1 Notes; and
    V = the amount of the most recent Open Market Valuation of all the Properties in the Group
    1 Property Portfolio;
  • Group 1 Notes means each Tranche of Notes sharing in the same security and designated as a Group 1 Note in its Applicable Pricing Supplement;
  • Open Market Valuation means in respect of the Properties in the Group 1 Property Portfolio, the annual property valuation undertaken and prepared at the instance of the Issuer in regard to all the Properties in the Group 1 Property Portfolio, which in relation to a minimum of 1/3 of the Properties in the Group 1 Property Portfolio, shall be undertaken by a Valuer or Valuers appointed by the Issuer and conducted in accordance with the valuation methodology approved by the Institute of Valuers from time to time; provided that in respect of any 3 year period all of the Properties in the Group 1 Property Portfolio will have been valued, in accordance with the valuation methodology approved by the Institute of Valuers from time to time or such other methodology approved in writing by Valuers approved by the Issuer; and
  • Group 1 Property Portfolio means those Properties in the Property Portfolio which provide security in respect of the Group 1 Notes, listed in a schedule provided to the Trustee on the Issue Date, as such schedule may be updated from time to time, including following any disposal of, addition to or substitution of, the Properties in accordance with the provisions Condition 25 of the Group
    1 Notes.
• The Group Interest Cover Ratio ("Group ICR") shall be at least 2.00 times for the Group. As per the Programme Memorandum the Group ICR is calculated as follows:
• • Group ICR means, in respect of any period, EBITDA divided by Net Interest Paid for that period.
  • EBIDTA means net income before Net Interest Paid, taxation, depreciation and amortisation, excluding income from revaluation of properties, straight-line rental adjustments and abnormal items including those within the income from equity-accounted investments.
  • Net Interest Paid means all the interest paid, including all and any interest obligations or other obligations (excluding any marked-to-market valuation swaps) which are in substance of a substantially similar nature to interest which are payable in terms of any off- balance sheet financing structure, less interest received by it.

The Issuer confirms that:

• the LTV ratio was tested as at 30 June 2022 and does not exceed 50%, with the LTV ratio measuring 40,5%;

• the LTV Group 1 ratio was tested as at 30 June 2022 and does not exceed 60%, with the LTV Group 1 ratio measuring 38,3%; and
• the Group ICR was tested as at 30 June 2022 and exceeds 2.0 times cover, with the Group ICR measuring 2,8 times cover.

19 August 2022

Debt Sponsor

RAND MERCHANT BANK (A division of FirstRand Bank Limited)