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Informist, Wednesday, Dec. 11, 2024

 

--Sources: Embassy REIT likely to raise up to INR 10 bln via 5-year bond 

--Sources: Embassy Office Parks REIT may tap mkt with 5-yr bond by next week 

 

By Sachi Pandey

 

MUMBAI – Embassy Office Parks REIT, India's first publicly-listed real estate investment trust, plans to raise funds and may tap the bond market as early as next week, according to sources familiar with the matter. The company is looking to raise up to INR 10 billion through bonds maturing in five years on a private placement basis.

 

"They are aiming for some 7-10 (INR 7 billion-INR 10 billion). Most of the process is almost done, they got ratings assigned as well. Now they just have to announce the details. Most probably Friday or next week Monday will be the bidding," a source in the know told Informist on the condition of anonymity. Earlier this week, CRISIL Ratings assigned an 'AAA' rating to Embassy Office Parks REIT's bonds worth up to INR 10 billion.

 

The bond issue is expected to have a base size of INR 5 billion, with a greenshoe option of another INR 5 billion, according to the sources. They also indicated the bonds will carry a coupon rate of 7.95%. One merchant banker involved in the process said the deal is nearly complete, with the coupon rate already decided, and only the details to be formally announced on the bidding platform in the coming days.

 

The bond issue will be Embassy Office Parks REIT's first foray into the market in the current financial year. It had raised INR 10 billion via bonds maturing on Sept. 5, 2025, in January. The bonds had a fixed coupon rate of 8.17%. The issue was fully subscribed.

 

While the arrangers for the upcoming bond issue have not been officially disclosed, market participants speculate this will be a direct deal. "As far as I think, it is a direct deal. Either investors approached them or they have approached investors, but it is a direct deal," a merchant banker said.

 

So far, only Mindspace Business Parks REIT has raised funds through the corporate debt market in 2024-25 (Apr-Mar), raising over INR 16 billion through three bonds at coupons ranging between 7.54% and 7.96%.

 

A real estate investment trust is a company that owns and typically operates income-producing real estate or related assets. It allows individuals to invest in large-scale, income-producing real estate which may include office buildings, shopping malls, apartments, hotels, resorts, self-storage facilities, and warehouses, among others. Unlike other real estate companies that focus on buying and reselling properties, a REIT's core objective is to buy and manage properties as part of a long-term investment portfolio and generate regular income for its investors.

 

At 1150 IST, units of Embassy Office Parks REIT traded almost flat at INR 374.26 on the National Stock Exchange. End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Namrata Rao

 

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