Embassy Office Parks REIT on Monday said it raised ₹4,600 crore debt at an interest rate of 6.5 per cent to repay its existing borrowing, leading to a saving of around ₹135 crore annually on interest cost.
In a regulatory filing, Embassy REIT said it has successfully raised ₹4,600 crore coupon-bearing debt at an interest rate of 6.5 per cent.
Refinance previous debt
Aravind Maiya, Chief Financial Officer, Embassy REIT, said that the company would utilise this fund to refinance its debt of ₹4,530 crore maturing in early November.
“…what we are refinancing is a ₹4,500-crore debt at 9.4 per cent. We are saving close to three per cent on this. So, that is ₹135 crore saving on interest cost per annum,” he said.
Maiya said the company had in May 2019 raised ₹3,650 crore through bonds at zero coupon rate along with redemption premium.
“The redemption amount is ₹4,530 crore which we need to repay in the first week of November,” he said.
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Explaining the transaction, Maiya said the company has raised ₹3,100 crore debt through issue of bonds. Out of this, ₹2,000 crore is at 6.3 per cent interest rate for a three-year tenure, while ₹1,100 crore is at seven per cent for a five-year tenure.
That apart, the company has raised ₹1,500 crore through lease rental discounting (LRD) with a bank at 6.4 per cent floating coupon.
“Blended, we have raised ₹4,600 crore at 6.5 per cent. Key takeways are — interest rate compression of close to 300 basis points, we have split tenure between three years and five years, and we have new investors like insurance companies coming and participating in REIT,” he said.
Lastly, Maiya said the average cost of its gross debt of around ₹11,500 crore has come down to 6.8 per cent from the original 9.4 per cent at the time of listing.
On Monday, the debenture committee approved the allotment of ₹3,100 crore Series-V rupee-denominated, listed, rated, secured, redeemable and transferable NCDs (non-convertible debentures) by way of private placement at 6.5 per cent average fixed coupon.
Embassy REIT is India’s first publicly listed real estate investment trust (REIT).
It owns and operates a 42.4 million square feet portfolio of eight infrastructure-like office parks and four city-centre office buildings in Bengaluru, Mumbai, Pune and the national capital region.
Embassy REIT’s portfolio comprises 32.3 million sq ft of completed operating area and is home to 190 of the world’s leading companies.