Embassy REIT raised Rs 4,600 crore to repay its existing zero-coupon bond

Embassy REIT has raised Rs 4,600 crore in a coupon-bearing debt at an attractive interest rate of 6.5 per cent.

Embassy Office Park REIT, the country’s first listed REIT, on October 18, said they have raised Rs 4,600 crore at an interest rate of 6.5 per cent to pay back its existing debts. The company said it will save around 135 crore annually on interest costs due to the low-interest rate.

The debt raised by Embassy REIT will be used to pay its existing coupon bond outstanding of Rs 4,530 crore. The company said the loan will help secure C.300 basis points interest saving annually.

“We are delighted to announce this comprehensive debt raise of Rs 4,600 crore which is a key milestone in our financing journey. With this refinancing, our consolidated debt cost reduces to 6.8% from the original 9.4% at the time of listing, thereby significantly reducing our interest cost to the benefit of our Unitholders. Also, we have been able to diversify our debt investor base by tapping into newer avenues of capital such as insurers, thereby underscoring the growing investor confidence in our business,” said Aravind Maiya, Chief Financial Officer of Embassy REIT.

The Debenture Committee approved the sum of Rs 3,100 crore under Series V Rupee- denominated, listed, rated, secured, redeemable, transferable NCDs through a private placement at an interest rate of 6.5%

The NCDs will be listed on the Wholesale Debt Market of BSE Limited Further, Embassy REIT got a term loan facility at SPV-level from a bank for Rs 1,500 crore at a 6.4% floating interest rate. Both these loans make up a total of Rs 4,600 crore. The funds will be used to redeem Series I NCDs on November 2.

The statement added rating agency CRISIL assigning the CRISIL AAA/Stable rating for the NCDs issued.

It added, Morgan Stanley, HSBC, and Kotak Mahindra Bank served as arrangers on the private placement and Talwar Thakore and Associates served as the legal counsel on the transaction.

Published by– Moneycontrol News