Embassy REIT raises ₹300 crore via NCD issue
Bengaluru: Embassy Office Parks REIT, the first listed real estate investment trust in India, on Tuesday said it has raised ₹300 crore through a placement of listed and transferable non-convertible debentures (NCD) at a 6.80% quarterly coupon, from domestic investors, including insurance firms.
The proceeds will be used to refinance existing construction finance debt.
This is the first time that insurers participated in a REIT debt, with a prominent life insurer anchoring the issuance, with over three times subscription, the company said.
This is also probably the first bond raise by a REIT in India, where a domestic insurance company has participated, after the Insurance Regulatory and Development Authority (IRDAI) in March allowed insurers to invest in debt securities issued by infrastructure investment trusts (InvITs) and REITs. This was expected to improve the overall yield of portfolios held by insurance companies while providing more long-term funding to the real estate sector.
“Following the recent IRDAI approval permitting insurance companies to invest in REIT debt, we are delighted to announce the first-ever bond raise by an Indian REIT with robust participation from the domestic insurance sector. This marks an important milestone in Embassy REIT’s ongoing efforts to diversify our debt investor base and also continues the trend of reduction in our cost of debt. This successful placement reiterates investor confidence in the long-term growth story of Embassy REIT and is the first of a number of refinance packages planned for this year," said Aravind Maiya, chief financial officer, Embassy REIT.
Morgan Stanley and HSBC served as arrangers on the private placement and Talwar Thakore and Associates served as the legal counsel on the transaction.