300 mn raised by HDFC through ECB
Housing Development Finance Corporation (HDFC) raised $300 million via external commercial borrowings (ECB). The amount was raised under the affordable housing scheme of the Reserve Bank of India. ECB loans carry a lower rate of interest and are raised abroad. The RBI has allowed housing finance companies to tap external sources of financing to enable them to lend to borrowers at cheaper rates for affordable housing projects. The loan is for duration of 5 years and the rate of interest is linked to USD Libor (London Interbank Offered rate) plus 1.75 per cent.
In 2012, HFCs and NHB were permitted by RBI to raise ECBs for financing prospective owners of low cost affordable housing units. In case of Low Cost Affordable Housing units, the property cost does not exceed Rs 30 lakhs, loan amount is limited to Rs 25 lakhs and the carpet area does not exceed 60 sq m. An aggregate limit of $1 billion each for FY 14 and FY 15 for ECBs has been prescribed by RBI.
The loan has been raised by HDFC from a consortium of four lenders, State Bank of India, Sumitomo Mitsui Banking Corporation, The Bank of Tokyo-Mitsubishi UFJ and DBS Bank.
Source: Business Line
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