In 2015, Lodha Developers International had raised $200 million via dollar bonds maturing in 2020 at a coupon rate of 12%.
Lodha Developers International has priced its dollar bonds, an extension of its debt issued in 2015, at a yield of 8.90% to raise $125 million, a source close to the deal confirmed to FE. An investment banker indicated that the initial guidance on the bond price stood at 105.50, which was revised to a range of 106.125-106.25. Bond prices and yields move in opposite directions, indicating that the final yield came down compared to the initial guidance. “The issue received bids of over $320 million from investors, 80% of whom are asset managers,” said a banker. The interest was mostly from Asia, he added. In 2015, Lodha Developers International had raised $200 million via dollar bonds maturing in 2020 at a coupon rate of 12%. Monday’s issue was a tap of these existing bonds. JP Morgan, CITIC CLSA Securities and UBS were bankers to the deal.Moody’s Investors Service said in a release that Lodha Developers Private’s (LDPL) 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 the Rupee debt it had taken for its London projects. “The refinancing will 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. The company could not be immediately contacted to confirm the story. 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, and in January 2017, the ratings were further downgraded to B2. Lodha Developers International’s bond issue comes at a time when high yield bonds from India have gained traction with around $6.425 billion issuance hitting the market so far in 2017.