The proceeds from the debt raised from mutual funds and insurance companies will be utilised by Embassy REIT to repay its existing zero-coupon bond outstanding of Rs 4,530 crores raised in 2009. The average tenure of debt raised is four years as compared to the 3-year listed bonds raised earlier.
“With this refinancing, our consolidated debt cost reduces to 6.8 per cent from the original 9.4 per cent 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,” Aravind Maiya, Chief Financial Officer of Embassy REIT.
The 14.8 mn sqft Embassy Manyata Business Park is one of the largest office parks in Bangalore that hosts tenants such as IBM, Cognizant, ANSR, and NOKIA.
The raised capital includes issuing Rs 1,100 crores of 5-year NCDs at 7.0 per cent and 2,000 crores of 3-year NCDs at 6.3 per cent. It also includes Rs 1,500 crores of term loan facility at SPV-level from a leading bank at a 6.4 per cent floating coupon payable monthly
“CRISIL AAA/Stable” rating assigned by rating agency CRISIL to the NCDs issued. 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.
Co-sponsored by the Blackstone Group and Embassy Group, Embassy Office Parks REIT is India’s first REIT was listed in April 2019. Co-sponsored by the Blackstone Group and Embassy Group, Embassy Office Parks REIT is India’s first REIT listed in April 2019.
In December, Blackstone and Embassy sold Embassy TechVillage, an integrated office park in Bangalore, to Embassy Office Parks REIT. Apart from this, a fundraising exercise by the REIT through a Qualified Institutional Placement (QIP) in December had lowered Blackstone’s holding in the REIT to 38 per cent from over 46 per cent.
Embassy REIT owns and operates a 42.4 million square feet (“msf”) portfolio of eight infrastructure-like office parks and four city-centre office buildings in office markets of Bangalore, Mumbai, Pune, and the National Capital Region. Its portfolio comprises 32.3 million sq ft completed operating area and counts over 190 global companies as occupiers.
