Embassy REIT raises 4,600 crore in debt to refinance existing loans
BENGALURU : Embassy Office Parks REIT, India’s premier listed real estate investment trust, announced on Monday it had raised ??4,600 crore of debt at 6.5% lower interest cost, which will be used to refinance its existing bond outstanding of ??4530 crore which will mature in early November.
With this, the company will effectively save around ??135 crore per year on interest charges.
In May 2019, Embassy REIT had raised ??3,650 crore through zero rate bonds with redemption premium.
The reimbursement amount of ??4,530 crore is due and is due on Nov. 2, a senior company executive said.
Embassy REIT is sponsored by Blackstone Group Lp and real estate company Embassy Group. It was listed on the stock exchange in April 2019 after raising approximately ??4,750 crore through public issue.
The company raised ??3,100 crore of debt per two-tranche bond issue. From this, ??2,000 crore is at an interest rate of 6.25% for a three-year term, while ??1,100 crore is for a longer term of five years. In addition, he raised ??1,500 crore through the Rental Discount (LRD) with a bank at a 6.4% floating coupon against its business park north of Bengaluru.
“The implications are threefold. There is a significant reduction in the cost of debt. Secondly, the mandate was partly extended to five years and thirdly, new investors such as insurance companies took part, ”said Aravind Maiya, CFO of Embassy REIT in an interview.
Embassy REIT’s consolidated gross debt amounts to ??11,500 crore, with an average cost of 6.8%, compared to 9.4% at the time of registration.
On Monday, the Debenture Committee approved the grant of ??3,100 crore NCD (non-convertible debentures) denominated in rupees, quoted, rated, guaranteed, redeemable and transferable by private placement at an average fixed coupon of 6.5%.
In September, Blackstone Group Lp sold approximately 5.7 crore units in Embassy REIT on ??2,000 crore as part of its strategy to monetize part of its investment.
Embassy Office Parks REIT raised $ 501 million in December through a qualified institutional placement of its units, to support the $ 1.3 billion acquisition of Embassy TechVillage, an office park in Bangalore.
Embassy REIT owns and operates 42.4 million square feet, including eight office parks and four office buildings in Bangalore, Mumbai, Pune and the National Capital Region. Its portfolio includes 32.3 million square feet of completed operating space and is home to 190 companies.
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