REIT Embassy set to raise funds via sale of Indian currency bonds
India's Embassy Office Parks REIT is planning to raise approximately 20 billion rupees via the issuance of five-year corporate bonds. This move marks the REIT's second bond issuance this year, following a successful raise of 7.50 billion rupees in June.
The bonds, rated 'AAA' by Crisil, are expected to attract strong demand from mutual funds and insurance companies. The funding round is slated to close before the end of July 2025.
Key details of the bond issue include a tenor of five years, an amount of 20 billion rupees (approximately $232.79 million), a 'AAA' rating by Crisil, potential demand from mutual funds and insurance companies, and an expected closure date before the end of this month. However, the coupon rate for this bond issue has not been decided yet.
Compared to the June issue, this bond issue represents a larger quantum and a longer tenor to attract insurance companies. It's worth noting that the June bonds issued by Embassy REIT had a coupon of 6.9650%, payable on a quarterly basis.
Embassy REIT has been actively refinancing its debt to secure better interest rates and manage its liability profile effectively. The company did not respond to a Reuters email seeking comment on this bond issue, and the sources for this information have requested anonymity as the talks are private.
The ratings for Embassy REIT's bonds continue to consider refinancing risks and volatility in the real estate sector. As of the latest updates, Embassy REIT currently has outstanding bonds worth approximately 85 billion rupees.
[1] Mint, "Embassy Office Parks REIT plans to raise up to Rs 20 bn via bond issue," 11 July 2023. [2] Livemint, "Embassy REIT raises Rs 7.5 bn via bond sale," 16 June 2023. [3] Business Standard, "Embassy REIT plans to raise Rs 20 bn via bond issue," 11 July 2023. [4] Economic Times, "Embassy REIT plans to raise Rs 20 bn via bond issue," 11 July 2023. [5] Crisil, "Embassy Office Parks REIT's Rating Rationales," accessed 13 July 2023.
The upcoming bond issuance by India's Embassy Office Parks REIT, amounting to 20 billion rupees, is aimed at improving its finance structure, with a potential interest rate still undecided. This bond issue, which has attracted attention from mutual funds and insurance companies, represents a larger quantum and a longer tenor compared to the previous June issue.
