Embassy Office Parks REIT (NSE: EMBASSY / BSE: 542602) (“Embassy REIT”), India’s first listed REIT and the largest office REIT in Asia by area, announced today that it has successfully raised ₹4,600 crores coupon-bearing debt at an attractive interest rate of 6.5%. The proceeds from this debt raise will be utilized by Embassy REIT to repay its existing zero-coupon bond outstanding of ₹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,

“We are delighted to announce this comprehensive debt raise of ₹4,600 crores which is a key milestone in our financing journey. With this refinancing, our consolidated debt cost reduces to 6.8% from the original 9.4% 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.”

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

Transaction Highlights

• Issuance of ₹3,100 crores of Embassy REIT Series V NCDs 2021 at 6.5% average fixed coupon payable quarterly
  • ₹1,100 crores of 5-year NCDs at 7.0% and ₹2,000 crores of 3-year NCDs at 6.3%
  • Robust demand from Mutual Funds, Life and General Insurers
  • “CRISIL AAA/Stable” rating assigned by rating agency CRISIL to the NCDs issued
• Secures ₹1,500 crores of term loan facility at SPV-level from a leading bank at 6.4% floating coupon payable monthly
• Proceeds to be used for early refinance of zero-coupon bond (Series I NCDs) which carried an average 9.4% coupon, resulting in a c.300bps positive refinance spread
• Average tenure of debt raised is 4 years and compares favorably to the 3-year listed bonds raised earlier
• Post this refinance, proforma debt of Embassy REIT would be ₹11,532 crores at 6.8% interest rate with a maturity of 3.7 years

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.