Lodha Group arm raises $125 million through bond issue

MUMBAI: Realty major Lodha Group’s subsidiary Lodha Developers International has priced a $125 million tap of its 2020 bonds at a yield of 8.89%, lowering its borrowing cost by 310 basis points or 3.1% compared to earlier bond sale.

The original issue 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 company said in a release.

Last week, ET first reported the realty developer’s plan to raise $100 million through this bond issue.

The tap was intended to be of $100 million and received robust interest from global investors, especially real money accounts. The total order book at final pricing was in excess of $320 million. On account of this strong interest, the deal was upsized to $125 million, Lodha said.

The tap proceeds will be used to pre-pay higher cost debt and is leverage neutral for the group. Lodha Developers International is 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.