HDFC raises $300 million through foreign borrowings

Firm to deploy money for low-cost housing units

Housing Development Finance Corporation (HDFC), the country's largest home finance company, has raised $300 million from lenders via external commercial borrowing (ECB).

Two Japanese banks, Sumitomo Mitsui and Bank of Tokyo-Mitsubishi, apart from State Bank of India (SBI) and Singapore-based DBS Bank, extended funding support.

SBI was one of the original mandated lead arrangers and book runners, while Bank of Tokyo-Mitsubishi and DBS Bank Ltd were the mandated lead arrangers, HDFC said in a statement. The borrowing facility has a tenure of five years.

HDFC has drawn down the facility in February 2014 from the above consortium of lenders. The rate of interest on the facility is 1.75 per cent more than the prevailing London Interbank Offered Rate (Libor).

The housing finance major has swapped the facility in rupees for the entire tenure of the loan.

The ECB, which is in the form of a syndicated loan facility, is a first by a housing finance company (HFC) under the low-cost affordable housing scheme of the Reserve Bank of India (RBI), floated in December 2012.

HFCs were permitted to raise ECBs for financing prospective owners of low-cost affordable housing units.

Low-cost affordable housing units are defined as units for which the property cost does not exceed Rs 30 lakh. The loan amount is capped at Rs 25 lakh. The carpet area of such houses does not exceed 60 sq m.

RBI has prescribed an aggregate limit of $1 billion each for FY14 & FY15 for ECBs to be drawn under this window.

HDFC's borrowers are predominantly middle-class individual households.