Embassy Office Parks REIT (Embassy REIT) has successfully raised Rs 1,000 crore by issuing non-convertible debentures (NCDs) under its Series XII NCDs 2024. The company plans to use the funds to repay existing debt, securing a significant interest savings of approximately 70 basis points from its current debt rate.
As published by The Economic Times, the newly issued NCDs carry a five-year tenure and an interest rate of 7.73%. The refinancing effort aims to optimize Embassy REIT’s financial structure by reducing the cost of borrowing, improving its cash flow, and enhancing its ability to invest in future projects.
The NCD issuance saw substantial participation from both existing and new investors. Of the total demand, nearly 55% came from existing investors, indicating strong confidence in Embassy REIT’s business model and financial management. In addition, the offering attracted a variety of investors, including mutual funds, pensions, and insurance companies. This widespread investor interest underscores the trust in the company’s growth potential and financial stability.
Ritwik Bhattacharjee, interim CEO of Embassy REIT, commented on the strong participation, emphasizing the broad spectrum of investors, including many first-time participants. The successful raise highlights the REIT’s strong relationship with its investor base, as well as its ability to attract new capital from different sectors.
The NCDs have received an “AAA/Stable” rating from both CRISIL and CARE, two of India’s leading credit rating agencies. These high ratings reflect the company’s strong capacity to meet its financial obligations and demonstrate the low credit risk associated with the raised debt. The “AAA” rating is a critical factor in reinforcing investor confidence in Embassy REIT’s long-term stability and financial health.
Embassy REIT was advised by Talwar Thakore & Associates, who served as the legal counsel for the debt issuance. Their involvement ensured that the transaction was completed smoothly and in full compliance with regulatory requirements, further boosting confidence in the process.
The debt refinancing marks an important step in Embassy REIT’s broader strategy to enhance its financial flexibility and optimize its capital structure. By securing favorable terms and reducing interest costs, the company can better allocate resources to support its expansion and future growth initiatives.
The interest savings of approximately 70 basis points will allow Embassy REIT to free up capital, which can then be reinvested into its portfolio of commercial properties and development projects. This refinancing not only strengthens its liquidity position but also supports its long-term strategy of enhancing value for investors.
Looking ahead, Embassy REIT is well-positioned to leverage this refinancing to further strengthen its market position. The company’s financial health and its ability to secure funding at competitive rates allow it to continue pursuing strategic opportunities, such as expanding its property holdings and enhancing its operational efficiency.
Embassy REIT’s ongoing financial optimization efforts, such as this debt refinancing, are expected to provide a solid foundation for continued growth. The company remains focused on its long-term objectives and is committed to generating value for its investors.
With a strong portfolio of commercial real estate across India and solid investor backing, Embassy REIT is poised to remain a leader in the Indian real estate investment trust (REIT) market.