HDFC Ltd reported that it had completed a USD 1.1 billion syndicated social loan facility for financing affordable housing projects in the country at a 3.3% coupon rate. This makes it the largest social finance issuance and the first social external commercial borrowing (ECB) loan out of India.
The social loan was priced at 90 BP (basis points) over the secured overnight financing rate (SOFR), a broad measure of the borrowing cost of cash overnight collateralized by treasury securities.
Recently, the Reserve Bank of India (RBI) has increased the limit of ECBs (under the automatic route) from USD 750 million to USD 1.5 billion. The mortgage indicates raising funds under this window of about USD 1.1 billion.
This funding will go towards financing affordable housing loans. HDFC, since its inception in 1977, has financed 9.5 million housing units. It has a gross loan book of Rs 6.7 trillion.
HDFC Ltd’s Chairman Deepak Parekh said that affordable housing is a critical component of quality infrastructure and a growth driver for the real estate industry and the economy at large. It contributes to securing a livelihood, capital formation, employment generation, and income opportunities. A boost to affordable housing will play a significant role in the ‘Housing for All’ objective of the government.
Mortgage financier HDFC Ltd’s net profit increased 22% year-on-year (YoY) to Rs 3,668 crore in the first quarter of FY23, supported by dividend income and lower impairment losses on financial instruments.