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Embassy REIT raises Rs 4,600 cr debt at 6.5%

03:15 PM Oct 18, 2021 | FPJ Web Desk

Embassy Office Parks REIT, announced today that it has successfully raised Rs 4,600 crores coupon-bearing debt at an attractive interest rate of 6.5 percent. The proceeds from this debt raise will be utilized by Embassy REIT to repay its existing zero-coupon bond outstanding of Rs 4,530 crores. Embassy REIT will be able to secure c.300 basis points interest savings annually through this refinance.

Aravind Maiya, Chief Financial Officer of Embassy REIT, commented,“With this refinancing, our consolidated debt cost reduces to 6.8 percent from the original 9.4 percent at the time of listing, thereby significantly reducing our interest cost to the benefit of our Unitholders. Also, we have been able to diversify our debt investor base by tapping into newer avenues of capital such as insurers, thereby underscoring the growing investor confidence in our business.”

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Earlier today, the Debenture Committee approved the allotment of Rs 3,100 crores Series V rupee-denominated, listed, rated, secured, redeemable, transferable NCDs by way of private placement at 6.5 percent average fixed coupon. The NCDs will be listed on the Wholesale Debt Market of BSE Limited. Further, Embassy REIT has secured a term loan facility at SPV-level from a bank for Rs 1,500 crores at 6.4 percent floating coupon. Both these proceeds, totaling Rs 4,600 crores, will be utilized to redeem the Series I NCDs on November 2, 2021.

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Morgan Stanley, HSBC and Kotak Mahindra Bank served as arrangers on the private placement and Talwar Thakore and Associates served as the legal counsel on the transaction.

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