Indiabulls Housing Finance raises Rs 3,000 crore

Indiabulls Housing Finance raised about 3,000 crore through bonds and offshore loans, using the proceeds to meet the ever-increasing demand for credit from borrowers keen to step onto the property ladder. LIC of India and Credit Suisse have subscribed to domestic bonds of 1,000 crore each. These 10-year bonds offer about 8.90 percent. It also raised about Rupee 250 crore with five-year maturity bonds that were sold to other investors. Five-year bonds will pay 8.80% a year. Furthermore, the triple-A rated company also raised $105 million (about Rupee735 crore) from overseas banks as part of its external commercial borrowing (ECB) programme.

So far, Indiabulls Housing has raised more than $1 billion in the ECB market with ANZ, Barclays Bank, CTBC, and MUFG helping their recent offshore fundraising. Early July, ET reported that the company had raised $240 million via ECB.

The housing finance company is likely to use interest rate swaps to convert these fixed rate liabilities to floating rate, which helps in asset-liability management, said one of the persons cited above. Interest rate swap, or IRS, is a derivate instrument that companies use as the hedge against interest rate fluctuations.