Lodha Developers hits the road with $100 million issue

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Mumbai | Published: November 22, 2017 3:42:43 AM

Moody's Investors Service said in a release that Lodha Developers Private's announcement of the tap bond offering by its wholly owned subsidiary Lodha Developers International is credit positive, but has no ratings impact.

Lodha Developers International is hitting the road with a $100 million bond issue.

Lodha Developers International is hitting the road with a $100 million bond issue. The company will conduct roadshows in Singapore, Hong Kong and London to market the dollar bonds, starting Wednesday. The bonds are an extension of its debt issued in 2015, sources aware of the deal told FE. The roadshows will continue till Friday and the bonds are likely to be priced next week, bankers indicated. In 2015, the company had raised $200 million via dollar bonds at a coupon rate of 12%. The forthcoming issue is a tap of the existing bonds which will mature in 2020. These bonds were quoted at a yield of 7.69% on Monday, according to Bloomberg data. Bankers say the tap issue might be priced in such a way that the yield looks a bit more attractive for investors. JP Morgan, CITIC CLSA Securities and UBS are the bankers to the deal.

Moody’s Investors Service said in a release that Lodha Developers Private’s announcement of the tap bond offering by its wholly owned subsidiary Lodha Developers International is credit positive, but has no ratings impact. “LDPL is focused on residential development in the Mumbai Metropolitan Region, with some projects in Pune. The company and its promoters have expanded into the London market by acquiring two properties that are now in the process of development,” Moody’s said. A banker pointed out that the company will use the proceeds to refinance its Rupee debt, which it had taken earlier for its London projects. The company could not be immediately contacted to confirm the story. “The refinancing will also lower LDPL’s interest costs — due to the higher interest rates of the debt that is being refinanced,” said Saranga Ranasinghe, assistant vice-president and analyst at Moody’s. When the 12% notes were first issued by Lodha Developers International, it was rated Ba3 by Moody’s. However, the ratings agency downgraded these bonds twice over the last two years. In May 2016, Moody’s downgraded the bonds to B1 from Ba3.

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