Indiabulls Housing Finance (IBHFL) has successfully priced its first overseas issue of unrated rupee denominated affordable housing masala bonds. The company has raised around Rs 1330 crore through this masala bonds. Yes Bank, Axis Bank, Merrill Lynch, Nomura, Credit Suisse and Citibank were the joint book-runners and joint lead managers in the transaction. IBHFL is the second housing finance company (HFC) and the fourth Indian corporate to issue rupee denominated bonds overseas pursuant to applicable Reserve Bank of India guidelines.
Rupee denominated bonds, which are also known as 'Masala Bonds', are instruments through which Indian entities can raise funds by accessing overseas capital markets and the bond investors hold the currency risk. The deal was announced on September 6, 2016 and attracted very high quality demand. The Rs 1330 crore issue of secured rupee denominated affordable housing masala bonds bears a coupon of 8.57% and has a tenor of 3 years and 1 month. This is a rupee based transaction and there is no foreign exchange exposure for IBHFL. The bonds will be listed on the Singapore Stock Exchange and cannot be traded in the local Indian market. The issue proceeds would be used for IBHFL's housing finance business, particularly housing loans in the affordable housing segment, as well as for general corporate purposes.
IBHFL has the highest AAA credit rating and the affordable housing masala bonds issue adds to an already well diversified funding mix of strong bond issuances and a large portfolio sell down programme, thus increasing avenues of funding other than term loans from banks. The strength of the domestic AAA rating and the quality of the credit enabled IBHFL to attract high quality demand to the affordable housing masala bond despite the issue not having an international rating.
| Company Name | CMP |
|---|---|
| LIC Housing Finance | 592.30 |
| Housing & Urban Dev. | 237.15 |
| Bajaj Housing Financ | 122.85 |
| Sammaan Capital | 156.25 |
| PNB Housing Finance | 896.30 |
| View more.. | |
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