HDFC raises $300 mn through FCB under new RBI plan

The Housing Development Finance Corp Ltd on Friday announced that it has raised $300 million through external commercial borrowing (ECB) from a consortium of four lenders under the affordable housing scheme of the Reserve Bank of India (RBI).

The borrowing, in the form of a syndicated loan facility, is the first by an Indian housing finance company and has a tenure of five years with the interest rate set at a spread of 1.75 percentage points over dollar Libor.

HDFC has swapped the facility in rupees for the entire tenure of the loan starting in February 2014.

The managers of the deal include State Bank of India and Sumitomo Mitsui Banking Corp as lead arrangers and book-runners, and the Bank of Tokyo-Mitsubishi UFJ Ltd and DBS Bank Ltd as mandated lead managers.

Roadshows shall be conducted by the lender banks in Taipei & Singapore in March 2014 to syndicate the facility and invite other international banks to participate in the facility, HDFC said.

The central bank in December 2012 had permitted housing finance companies and the National Housing Bank to raise ECBs for financing prospective owners of low cost affordable housing units.

Low cost affordable housing units are defined as units where the property cost does not exceed Rs30 lakh, loan amount is capped at Rs25 lakh and the carpet area does not exceed 60 sq m. The central bank has prescribed an aggregate limit of $1 billion each for FY 14 & FY 15 for ECBs to be drawn through this window.