Indiabulls Housing Finance Paid ₹291.49 Crore to Lender Repayment Trust

On April 15, 2024, Indiabulls Housing Finance Limited (IHFL), one of the leading housing finance companies, announced that it had transferred the second tranche of the Reserve amount of ₹291.49 crore to the lender repayment trust (IDBI Trusteeship Services Limited) for Foreign Currency Convertible Bonds (FCCBs) redemption on the optional put date of September 29, 2024.

IDBI Trusteeship Services Limited, in turn, created a fixed deposit (FD) using the Reserve amount with RBL Bank Limited, a Scheduled Commercial Bank, and such Reserve amount shall be utilised for the redemption of the FCCBs in compliance with applicable laws.

At maturity, the fixed deposit proceeds would be used to discharge the company’s liabilities to the FCCB holders. This is in addition to the first tranche of the voluntary reserve of ₹2.91 billion. The trust has now done FDs for 50% of the total maturity value of outstanding FCCBs, i.e., USO 135 million due on September 28, 2026, with an optional put date of September 29, 2024.

Understanding the Repayment Trust

The lender repayment trust is a dedicated financial entity that holds funds earmarked for repaying lenders. By transferring a portion of its reserves to this trust, IHFL creates a layer of security for its lenders, fostering trust and confidence in the company’s financial stability.

Background

In September 2021, Indiabulls Housing Finance Limited issued 4.5% secured convertible US dollar-denominated Foreign Currency Convertible Bonds (FCCBs) aggregating USD 165 million for a tenor of about 5 years, maturing on September 28, 2026, with an optional put date of September 29, 2024. The outstanding exposure of these FCCBs is fully hedged in accordance with extant RBI guidelines for External Commercial Borrowings, thereby ensuring that the outstanding FCCBs are effectively a rupee liability amounting to ₹11.66 billion.

About Indiabulls Housing Finance Ltd

Incorporated in 2205, Indiabulls Housing Finance Ltd is registered with and regulated by the National Housing Bank (NHB). The company provides home loans and loans against property. IHFL also provides corporate mortgage loans, such as lease rental discounting and residential construction finance.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.