Embassy Office Parks REIT is preparing to raise Rs20 billion through the issuance of five-year corporate bonds, marking its second debt market foray this year. Discussions with bankers are underway, and the funding round is expected to close by the end of July, according to sources familiar with the matter.
The proposed bonds carry a 'AAA' rating from CRISIL, making them attractive to institutional investors including mutual funds and insurance firms. The higher tenor is aimed at widening appeal among insurance companies, compared to the REIT’s previous Rs7.5 billion issue in June, which carried a shorter 21-month maturity at a 6.965% coupon.
While the coupon rate for the upcoming issuance is yet to be finalized, CRISIL notes that the REIT's overall credit profile remains stable. The agency factors in strong operating performance and prudent leveraging, which continue to offset exposure to real estate sector volatility and refinancing risks.
Embassy REIT currently has Rs 85 billion in outstanding bonds, and this Rs20 billion issue adds further depth to its funding strategy as it expands across India’s commercial office market. With rising occupancy levels, improving cash flows, and lower interest rates, real estate investment trusts like Embassy are leveraging debt as a stable financing avenue for growth.
