HDFC on Friday announced the completion of a $1.1 billion syndicated social credit facility to finance affordable housing in India. The company called it the largest social loan globally and the first social ECB loan outside India. Notably, this is the largest ECB loan deal from a housing finance company/private NBFC in the country. HDFC loans are priced competitively at a margin of 90 basis points from the secured overnight financing rate (SOFR).
External commercial borrowings (ECBs) are Loan Offered to Indian borrowers by non-resident lenders in India. The loans are in foreign currency and are widely used by private companies and PSUs in India.
In its regulatory filing, the NBFC giant said the proceeds from social loans will go towards financing and promoting affordable housing loans. HDFCLong standing mission to become 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 Borrower (MLAB). In finance, an MLAB is an institution that sets the terms and conditions of a syndicated loan.
Other MLABs include CTBC Bank, Mizuho Bank, State Bank of India and Sumitomo Mitsui Banking Corporation. These banks are also joint social credit coordinators.
“Affordable housing is an important component of quality infrastructure as well as a growth driver for the real estate industry given its strong links to nearly 300 industries. It contributes to capital formation, employment and income opportunities. Promotion of affordable housing will play a vital role in the government’s objective of ‘Housing for All’. The aspiration to own a home is inherent in every household”, said Mr. Deepak Parekh, Chairman, HDFC Ltd, as per the company’s press release.
“In India, with the increasing demand for affordable housing, housing will play an important role as a catalyst for growth. With India’s growth prospects, I have never been as optimistic about the affordable housing sector as I am today”, he said.
HDFC shares closed on BSE 2,353.75 less in each 6.65 or 0.28%. The market cap of the company is approx. 4,27,079.97 crores.
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