Raheja Corp to raise Rs 500 crore through CMBS

K Raheja Corp, one of the largest owners of office properties, is looking to raise Rs 500 crore through commercial mortgage-backed securities (CMBS) for its infotech park in Hyderabad. 

K Raheja IT Park in Raheja Mindspace in Hyderabad is issuing non-convertible debentures (NCDs) where the issuance would be secured by the mortgage of commercial properties and charge on the lease rents produced by the property. The property has area of over 100 acres and is 99 per cent leased out. 

“We expect to do more such DCM transactions and hope to bring down our cost of funds in the process,” Sunil Hingorani, director, finance, K Raheja Corp said.

 

Though CMBS is not considered attractive in a downward rate scenario as it carries a fixed rate of borrowings, an executive in Raheja Corp said, “All our bank borrowings are at a floating rate and we need to build a portfolio of fixed rate borrowings. The expected quote of this borrowing will definitely be lower than our bank borrowing.” 

India Ratings has assigned AAA ratings for the issue.

This is the second such CMBS issue by K Raheja Corp group. In 2014, Intime Properties, part of the group, raised Rs 340 crore through the issue of NCDs with a fixed rate of 9.95 per cent. 

DLF had completed the country’s first CMBS issue in the last quarter of 2013-14, raising Rs 900 crore through the issuance on DLF Emporio and DLF Promenade, two of its malls in Delhi.