Indian high yield first to build deal pipeline

Author: Ashley Lee | Published: 26 Nov 2014

Indiabulls has become the first Indian real estate company to tap the high yield market. The offering is also one of the country’s first to include an onshore guarantee from its parent company.

The $175 million five-year offering with a coupon of 10.25% listed on November 13. It is guaranteed by Indiabulls Real Estate Limited and its major subsidiaries. It was rated B+ by Fitch Ratings, and proceeds will be used to repay financing that was used to fund its London property purchase.

The company’s ability to guarantee its bonds distinguishes its credit from Chinese real estate developers, which have been especially active in the high-yield market. Chinese issuers are unable to guarantee their bonds. Although they can include other forms of credit support, investors are structurally...