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Embassy Office Parks REIT has approved the issuance of commercial papers worth INR 1,100 crore in two tranches to refinance existing borrowings and meet working capital requirements. The decision was cleared by the debenture committee of Embassy Office Parks Management Services in the past week. The fundraising will be undertaken through two issuances of INR 650 crore and INR 450 crore, with tenures of 347 days and 342 days respectively. The issuance forms part of a broader debt programme allowing the REIT to raise up to INR 10,500 crore through multiple instruments. The commercial paper programme has received top short-term credit ratings of A1+ from CRISIL and CARE, indicating strong repayment capacity and low credit risk.
Embassy Office Parks REIT has approved the issuance of INR 1,100 crore through commercial papers in two tranches in the past week, as part of its ongoing efforts to refinance existing debt and meet working capital requirements across its portfolio. Advertisement
The approval was granted by the debenture committee of Embassy Office Parks Management Services, the manager to the REIT, during a meeting held recently. The issuance will be structured into two tranches, comprising INR 650 crore with a tenure of 347 days and INR 450 crore with a tenure of 342 days, both denominated in Indian rupees.
The proceeds from the issuance are intended to be utilised for refinancing existing borrowings as well as supporting operational liquidity requirements of the REIT, including its special purpose vehicles and holding entities. This approach aligns with the REIT's broader capital management strategy, which involves the use of short-term debt instruments to manage cash flows and optimise borrowing costs.
The fundraising forms part of a previously approved plan that allows Embassy REIT to raise up to INR 10,500 crore through a mix of debt instruments. The current issuance is structured within regulatory limits, with the REIT maintaining that total outstanding commercial paper borrowings, including this tranche, will remain within 10% of its consolidated debt.
Credit rating agencies CRISIL and CARE have assigned their highest short-term rating of A1+ to the commercial paper programme. This rating reflects a strong capacity for timely repayment of financial obligations and indicates relatively low credit risk for investors subscribing to the issuance.
Commercial papers are typically used by real estate investment trusts and corporates as a short-term financing tool to address immediate liquidity needs, refinance maturing obligations, and manage working capital cycles. For Embassy REIT, which operates a large portfolio of office assets across key markets, such instruments provide flexibility in managing its debt maturity profile and funding requirements.
The REIT has consistently accessed debt markets to manage its capital structure, including earlier issuances of non-convertible debentures and commercial papers. The current move reflects continued reliance on diversified funding sources to maintain liquidity and financial discipline amid ongoing operational requirements and portfolio expansion activities.
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