DLF Emporio Raises Rs 525 Crore Via Securities
DLF’s subsidiary, DLF Emporio has raised Rs 525 crore through India’s first commercial mortgage backed security (CMBS) issue, a new way for Indian real estate developers to raise funds.
In a CMBS issue, a company raises money upfront by issuing non-convertible debentures (NCDs) to investors. The company pays off the principal at the end of the CMBS tenure, while paying interest on the principal every month using rentals from the commercial property.
DLF Emporio raised the funds, which carry a legal maturity of 7.5 years, at a coupon rate of 10.9%. They will pay the interest every month through the rentals accrued from the 3,00,000 sq. ft. luxury mall in New Delhi.
DLF called this move a landmark issuance, and said it will pave the way for more such issuances in the future. DLF says this while they’re in the process of another CMBS issue in a bid to raise Rs 375 crore against another mall in Delhi.
Source: The Economic Times
CMBS, commercial mortgage backed security, DLF Emporio, luxury mall in New Delhi, Non-Convertible Debentures
