HDFC announced the completion of the $1.1 billion Syndicated Social Loan Facility for financing affordable housing in India. The company called it the largest social loan globally and the first social ECB loan out of India. Notably, this is also the largest ECB loan deal from a Housing Finance Company/ private NBFC in the country. The HDFC loan has been priced competitively at a margin of 90 basis points over the Secured Overnight Financing Rate (SOFR).
External Commercial Borrowings (ECB) are loans in India given by non-resident lenders to Indian borrowers. The loans are in foreign currency and are used widely in India by private companies and PSUs.
In its regulatory filing, the NBFC giant stated that proceeds from the social loan would go towards financing affordable housing loans and promotes HDFC’s longstanding mission to be the leading provider of housing loans in India. HDFC has already financed 9.5 million housing units and has a gross loan book of ₹6.7 trillion.
Japan’s largest bank MUFG bank is the Lead Social Loan Coordinator and Mandated Lead Arranger and Borrowers (MLAB). In finance, MLAB is an entity that determines the terms and conditions of a syndicated loan.
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Other MLABs include CTBC Bank, Mizuho Bank, State Bank of India, and Sumitomo Mitsui Banking Corporation. These banks are also the Joint Social Loan Coordinators.
“Affordable housing is a critical component of quality infrastructure as also a growth driver for the real estate industry and the economy at large given its strong linkages to nearly 300 industries. It contributes to capital formation, employment, and income opportunities. A boost to affordable housing will play a significant role in the ‘Housing for All’ objective of the government. The aspiration to own a home is inherent in every household”, said Mr. Deepak Parekh, Chairman, HDFC Ltd, according to the press release of the company.
“In India, housing will play an important role as a catalyst for growth with increased demand for affordable housing. Combined with India’s growth prospects, I have never been as optimistic about the affordable housing sector as I am today”, he added.
On BSE, HDFC shares closed at ₹2,353.75 apiece down by ₹6.65 or 0.28%. The company’s market cap is around ₹4,27,079.97 crore.
Source: Live Mint