Embassy REIT Successfully Raises Rs 2,000 Crores Debt to Refinance NCDs

Successful Debt Raise

Embassy Office Parks REIT, India’s first publicly listed REIT and Asia’s largest office REIT by area, has successfully raised Rs 2,000 crores in debt at a competitive interest rate of approximately 7.95%. This debt issuance aims to refinance Non-Convertible Debentures (NCDs) maturing in October 2024, positioning the company for continued financial stability and future growth.

Strong Market Response

The debt raise saw robust demand, with oversubscription of the Rs 900 crore NCD issuance by three times. The overwhelming response from mutual funds and insurers led to a reduction of about 10 basis points on the offered rate, underscoring Embassy REIT’s solid reputation in the credit market. CRISIL, the leading rating agency, assigned a ‘AAA/Stable’ rating to the NCDs, further enhancing investor confidence.

Aravind Maiya, CEO of Embassy REIT, expressed confidence in the transaction, stating, “This successful fundraise and the attractive pricing cement our position as the industry’s leading credit. It allows us to maintain control over our balance sheet and prepares us to leverage future rate cuts for capital growth.”

Transaction Highlights

• NCD Issuance: Rs 900 crores Embassy REIT Series XI NCDs with an interest rate of 7.87%.
• Term Loans: Rs 1,100 crores from major public and multinational banks at an ~8% floating coupon.
• Oversubscription: 3x oversubscription, resulting in savings of ~10 basis points.
• Purpose: Refinancing of Series V NCDs maturing in October 2024.

About Embassy REIT

Embassy REIT manages a portfolio of 51 million square feet across major office markets in India, including Bengaluru, Mumbai, Pune, NCR, and Chennai. Its strong tenant base, consisting of 258 leading global companies, ensures a steady revenue stream. In addition to office spaces, the REIT includes business hotels, solar power facilities, and a robust ESG program that has earned global accolades. Embassy REIT’s sustainability efforts were recently recognized in the 2023 Dow Jones Sustainability Indices.

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.