Embassy Office Parks REIT on Tuesday said it has raised Rs 300 crore by issuing non-convertible debentures (NCDs) on a private placement basis. The proceeds will primarily be used to refinance existing construction finance debt.
The Embassy REIT Series IV NCDs 2021 are proposed to be listed on the wholesale debt market of the BSE. The tenure of the NCDs is five years with a coupon rate of 6.80% per annum.
On September 2, the debenture committee of Embassy REIT’s board of directors approved an issue of NCDs for a principal aggregate amount of up to Rs 300 crore. On Tuesday, the committee approved the allotment of these NCDs. Ratings agency Crisil has assigned ‘AAA/Stable’ rating to these NCDs.
“Following the recent Irdai approval permitting insurance companies to invest in REIT debt, we are delighted to announce the first-ever bond raise by an Indian REIT, with robust participation from the domestic insurance sector. This marks an important milestone in Embassy REIT’s ongoing efforts to diversify our debt investor base and also continues the trend of reduction in our cost of debt,” Embassy REIT CFO Aravind Maiya said.
This successful placement reiterates investor confidence in the long-term growth story of Embassy REIT and is the first of a number of refinance packages planned for this year, he said.
Embassy REIT’s board has approved fundraising of up to Rs 4,600 crore via rupee-denominated, listed, rated, secured/ unsecured, redeemable, transferrable non-convertible debentures in one or more tranches. During Q1 FY22, it raised Rs 1,200 crore debt at 7.4% interest cost and refinanced Rs 520 crore, leading to 80 bps saving. Morgan Stanley and HSBC served as arrangers on the private placement and Talwar Thakore and Associates served as the legal counsel on the transaction.
The company owns and operates 42.4 million sq ft of eight infrastructure-like office parks and four city‐centre office buildings in Bangalore, Mumbai, Pune, and Delhi NCR.