Embassy Office Parks REIT, the largest office REIT in Asia by area, successfully raised INR 2,000 crore through debt issuance, attracting an interest rate of 7.95%. This capital infusion will facilitate the repayment of non-convertible debentures maturing in October 2024. Institutional investors, especially mutual funds and insurance companies, exhibited strong demand, leading to an oversubscription of three times the initial offering. Additionally, Embassy REIT issued INR 900 crore in Series XI NCDs at a 7.87% interest rate. This strategic refinancing not only enhances the company's financial stability but also positions it to effectively seize future opportunities in the capital markets.
Embassy Office Parks REIT, India's first listed and the largest office REIT in Asia by area, has raised INR 2,000 crores through coupon-bearing debt at an interest rate of approximately 7.95%. The company intends to allocate the funds toward repaying its INR 2,000 crore non-convertible debentures (NCDs) due in October 2024. This refinancing effort strengthens the company's financial position and allows it to effectively manage its balance sheet while preparing for future opportunities in the capital markets.
Aravind Maiya, CEO of Embassy REIT, noted that the refinancing is part of the company's strategy to optimise its capital structure, adding that the move will enable the REIT to capitalise on future interest rate cuts, potentially reducing future capital costs. Embassy REIT has issued INR 900 crore in Series XI NCDs for 2024, securing an effective interest rate of 7.87%. The issuance attracted significant interest from mutual funds, life insurers, and general insurance companies, leading to an oversubscription three times the initial offering.
This high demand enabled Embassy REIT to lower the offered rate by about 10 basis points. The NCDs received the "CRISIL AAA/Stable" rating, highlighting their strong credit profile. Additionally, the REIT secured INR 1,100 crores in term loans from top public sector and multinational banks at a floating interest rate of around 8.0%. The company will also allocate these funds to repay the Series V NCDs due in October 2024. The pricing of these loans reflects the growing demand for high-quality REIT credit as banks look for stable investment opportunities.
Talwar Thakore & Associates acted as legal counsel for Embassy REIT in this transaction, further ensuring a smooth execution of the refinancing process. Embassy REIT's expansive portfolio consists of 51 million square feet of office space spread across key markets, including Bengaluru, Mumbai, Pune, the National Capital Region (NCR), and Chennai. Of this, 37.7 million square feet are already operational, with additional assets under development.
The portfolio also includes several strategic amenities, such as four operational business hotels, two hotels under construction, and a 100 MW solar park that provides renewable energy to its tenants. With this successful refinancing, Embassy REIT has reaffirmed its strong financial standing and its ability to continue delivering value to its investors while positioning itself for future growth in India's rapidly expanding commercial real estate sector.
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