Cube Highways Trust raises ₹1,152 cr through non-convertible debentures

Cube Highways Trust, an infrastructure investment trust (InvIT), raised ₹1,152 crore via the issuance of AAA-rated non-convertible debentures (NCDs).

 

The InvIT issued the NCDs across two tenures – three-year and seven-year.

 

The three-year series was raised at a coupon of 7.25 per cent with a premium over face value and a subscription of approximately 2.6 times the offer for refinancing of the existing rupee loan. The final participants included five mutual funds and a non-banking financial company (NBFC).

 

The seven-year series was raised at a coupon of 7.3 per cent with a premium over face value and a subscription of approximately two times the offer for refinancing of an existing rupee loan. The final participants included four insurance companies, a pension fund, and an NBFC.

 

Commenting on the transaction, Pankaj Vasani, group chief financial officer of Cube InvIT, said, “The proceeds from this transaction are proposed to be used to refinance existing floating rate loans (thus does not increase overall debt outstanding) and aligns with our strategy of locking in fixed-rate borrowings during favourable movement of the interest rate cycle. Following this transaction, fixed-rate borrowings will constitute 28 per cent of our obligations and will lead to a reduction in the Trust’s overall borrowing cost by 12 basis points.”

 

Further, Vinay Sekar, chief executive officer of Cube InvIT, stated that the strong investor participation will further diversify the InvIT’s funding sources, complementing existing relationships with banks and multilateral and development finance institutions.

 

Established in 2022, Cube InvIT operates 25 assets worth ₹31,461 crore across 12 Indian states as of December 2024. Its assets’ average residual concession period is about 19.6 years.

 

Earlier, in February, the International Finance Corporation (IFC) invested ₹860 crore (approximately $98.35 million) in a sustainability-linked bond (SLB) issued by the InvIT. In the same month, the InvIT signed share purchase agreements (SPA) with the National Investment and Infrastructure Fund Limited (NIIF) to acquire two annuity-based road assets located in Jammy at an enterprise value of ₹4,184 crore.

 

The InvIT is backed by a diversified investor base, including I Squared Capital, a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA), British Columbia Investment Management Corporation, and Abu Dhabi’s sovereign investor, Mubadala Investment Company.