DLF raises Rs 525 cr through CMBS

Real estate major DLF has raised Rs 525 crore through debt instruments backed by a luxury shopping mall in Delhi, making it the country's first commercial mortgage backed securities (CMBS) offering.

In a filingto the BSE, DLF said that "DLF Emporio Ltd, a subsidiary of DLF, hassuccessfully placed India's first Commercial Mortgage Backed Security (CMBS) issuance of Rs 525 crore, with a coupon rate of 10.90% per annum andlegal maturity of 7.5 years."

DLF Emporio owns and operates about 3 lakhsq ft of a luxury mall in Vasant Kunj, Delhi. In Octoberlast year, it had announced a plan to raise about Rs 1,000 crore through issueof securities backed by mortgage of two retail assets as part of strategy toreplace costlier debt, which stood at Rs 17,400 crore two months back.

"Thisis a landmark issuance, being the first of its kind in the country at acompetitive pricing. This shall pave way for more such issuances infuture," DLF said. In CMBS,funds available with the issuer during the tenure of the instrument are higherthan lease rental-discounting loans from banks.

These loans have a structurewhere principal repayment is amortised, while CMBS will have a bulletrepayment.Last month,rating agency Crisil assigned 'AA(SO)/Stable' rating to the DLF's CMBS (issuedas non-convertible debentures) indicating high safety with stable outlook.

Theratings were for DLF Emporio's issue of Rs 525 crore, and DLF Promenade's issueof Rs 375 crore. DLF Promenade issue will come up for subscription in next twoweeks. DLF Emporioand DLF Promenade have a total leasable area of nearly 8 lakh sq ft.

In 2012-13fiscal, DLF Emporio reported a profit after tax of Rs 61 crore on a totaloperating income of Rs 118 crore. DLF Promenade reported losses of Rs 9.43crore in 2012-13 due to high interest costs on inter-corporate deposits and hada total operating income of Rs 83 crore.