Lodha Developers International Limited, a subsidiary of India’s No. 1 real estate developer Lodha Group, has priced a US$125 million tap of its 2020 bonds at a yield of 8.89%, a 310 bps (3.1%) reduction in yield from the original issue which was done at a yield of 12%. The tap was done at a price of 106.25, at a premium to the original issuance. The bonds are listed on the Singapore Stock Exchange (SGX).
The tap was intended to be of US$100 million and received strong interest from global investors, especially real money accounts. The total order book at final pricing was in excess of US$320 million. On account of this strong interest, the deal was upsized to US$125mm.
The tap proceeds will be used to pre-pay higher cost debt and is leverage neutral for the group. Lodha Developers International Limited, rated B2/stable by Moody’s and B stable by Fitch. Both agencies have reaffirmed the rating following the bond tap announcement last week. Moody’s also announced that Lodha would benefit from high-cost-debt reduction via bond tap and government’s affordable-housing push.
Established in 1980, privately held Lodha Group is India’s leading real estate developer and amongst the world’s select multinational real estate developers with presence in India and the United Kingdom. The company is the largest in India by sales for five consecutive years, having clocked over INR 8,200 Cr of net sales for FY 16-17. It is currently developing world-class projects such as Lodha Altamount, The World Towers, Trump Tower Mumbai, One Grosvenor Square, Palava among other landmarks. Lodha Group has the largest land reserves in the Mumbai Metropolitan Region and has 26 ongoing projects across London, Mumbai Metropolitan Region, Pune and Hyderabad. In FY 2016-17, Lodha Group spent Rs. 3,700 crore on construction, delivering over 7,200 units across projects.