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Embassy Office Parks REIT, the country’s first listed REIT, on October 18, said it has raised Rs 4,600 crore debt at a low-interest rate of 6.5 percent to repay its existing borrowing, leading to a saving of around Rs 135 crore annually on interest cost.
In a regulatory filing, Embassy REIT said it has successfully raised Rs 4,600 crore coupon-bearing debt at an attractive interest rate of 6.5 percent.
The proceeds from this debt raise will be utilised by Embassy REIT to repay its existing zero-coupon bond outstanding of Rs 4,530 crore. Embassy REIT will be able to secure c.300 basis points interest savings annually through this refinance, it said.
“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.
On October 18, the Debenture Committee approved the allotment of Rs 3,100 crore Series V rupee-denominated, listed, rated, secured, redeemable, transferable NCDs by way of private placement at 6.5% average fixed coupon.
The NCDs will be listed on the Wholesale Debt Market of BSE Limited Further, Embassy REIT has secured a term loan facility at SPV-level from a bank for Rs 1,500 crore at a 6.4% floating coupon. Both these proceeds, totaling Rs 4,600 crore, will be utilised to redeem the Series I NCDs on November 2, 2021, the company said in a statement.
Rating agency Crisil has assigned CRISIL AAA/Stable rating to the NCDs issued, the statement said.
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, it said.