DLF raises Rs 525cr via securities backed by Delhi retail mall

Realty giant DLF today said it has raised Rs 525 crore through debt instruments backed by a luxury shopping mall in the national capital, marking the country's first commercial mortgage backed securities (CMBS) offering.
India's largest realty firm DLF had announced in October 2013 a plan to raise about Rs 1,000 crore through issue of securities backed by mortgage of two retail assets as part of strategy to replace costlier debt, which stood at Rs 17,400 crore two months back.
In a filing to the BSE, DLF said that "DLF Emporio Ltd, a subsidiary of DLF, has successfully placed India's first Commercial Mortgage Backed Security (CMBS) issuance of Rs 525 crore, with a coupon rate of 10.90 per cent per annum and legal maturity of 7.5 years."

DLF Emporio owns and operates about 3 lakh sq ft of a luxury mall in Vasant Kunj, Delhi.
"This is a landmark issuance, being the first of its kind in the country at a competitive pricing. This shall pave way for more such issuances in future," DLF said.
Last month, rating agency Crisil assigned 'AA(SO)/Stable' rating to the DLF's CMBS (issued as non-convertible debentures) indicating high safety with stable outlook.

The ratings were for DLF Emporio's issue of Rs 525 crore, and DLF Promenade's issue of Rs 375 crore.
The DLF Promenade issue will come up for subscription in next two weeks.

DLF Emporio and DLF Promenade have a total leasable area of nearly 8 lakh sq ft.
In 2012-13 fiscal, DLF Emporio reported a profit after tax of Rs 61 crore on a total operating income of Rs 118 crore.
DLF Promenade reported losses of Rs 9.43 crore in 2012-13 due to high interest costs on inter-corporate deposits and had a total operating income of Rs 83 crore.
In CMBS, funds available with the issuer during the tenure of the instrument are higher than lease rental-discounting loans from banks. These loans have a structure where principal repayment is amortised, while CMBS will have a bullet repayment.

DLF has a total developable potential of 312 million sq ft, of which 60 million sq ft is under construction.