DLF raises Rs 375 crore via commercial mortgage backed securities

Mumbai/Bangalore: DLF Ltd, India’s largest realty developer in terms of market capitalization, has raised Rs.375 crore by issuing commercial mortgage backed securities (CMBS) against its South Delhi based luxury mall DLF Promenade Ltd.

A CMBS is a form of debt product wherein the developer raises capital against a rent-yielding commercial asset for a tenure of seven- eleven years depending upon the specific tenure of each issuer. The paper carries a fixed interest rate unlike other debt instruments.

The paper, which carried an interest rate of 10.9%, has a maturity of 7.5 years, it said in a communication to the stock exchange.

This is the second issuance from DLF Group in the last one month. In May, the firm had raised Rs.525 crore against its South Delhi-based luxury mall DLF Emporio Ltd, marking the first CMBS issuance in the country by a developer.

With this issuance, DLF has collectively raised Rs.900 crore through the CMBS route against two of its retail malls.

Saurabh Chawla, executive director, finance, at DLF, said Friday’s issue marks the completion of DLF’s Phase I of CMBS issuances. The firm will continue to explore more such transactions in the future, Chawla said.

While announcing its March quarter financial results, DLF had said that the company plans to raise around Rs.3,000- Rs.3,500 crore capital in the current fiscal year against its office properties.

DLF Ltd