K Raheja IT Park (Hyderabad) Ltd (KRIT), a unit of Mumbai-based real estate firm K Raheja Corp, said Wednesday that it plans to raise Rs500 crore through an issue of non-convertible debentures (NCDs) in the form of commercial mortgage-backed securities (CMBS) mainly to refinance its bank borrowings.
KRIT is a joint venture between K Raheja Corp Group and Andhra Pradesh Industrial Infrastructure, with the property developer holding 89% stake. The joint venture operates Raheja Mindspace IT Park at Hyderabad’s Hitech City, which has around 11 commercial buildings with a total saleable area of 2.61 million sq. ft spread across 23 acres.
The NCDs will have a nine-year tenure with multiple call options. The issuer can effect early redemption of the bonds between the second and the fourth year, at the end of the fourth year and at the end of the sixth year. Credit rating agency India Ratings has assigned a AAA(SO) rating for the proposed NCDs.
“Some of the funds will go to repay bank borrowings and some will be for general corporate purposes,” Sunil Hingorani, director (finance), K Raheja Corp said in a statement.
Thanks to its prime location and competitive rentals, the Hyderabad property is 99.05% occupied with an average rental of 8-12%, the statement said.
“Since we have got a strong rating of AAA we expect to be able to raise funds at a much lower cost as compared to other bank loans,” Hingorani said.
This is the second CMBS transaction of the company. In 2014, Intime Properties Ltd, another unit of K Raheja Corp had raised around Rs350 crore through NCDs.