HDFC raises $1.1 billion loan for affordable housing

5 Aug 2022 , 11:04 AM

HDFC Limited announced closing of the USD 1.1 billion Syndicated Social Loan Facility to finance affordable housing in India. The loan has been priced competitively at a margin of 90 bps over SOFR (Secured Overnight Financing Rate).

The company highlighted that the said transaction represents several significant milestones, namely, India’s largest social financing issuance, the largest social loan globally, the first social ECB loan originated outside of India, and the largest ECB loan deal initiated by a Housing Finance Company/private NBFC in India.

This historic financing advances HDFC’s long-standing goal of becoming India’s leading housing finance provider.

The NBFC stated that it plans to use the proceeds of the social loan to finance affordable housing loans.

HDFC has financed approximately 9.5 million housing units and has a gross loan book of Rs6.7 trillion since its inception in 1977. HDFC has been regarded as a housing finance model for countries with developing mortgage markets.

Deepak Parekh, Chairman of HDFC Ltd, commented on the occasion, “Affordable housing is a critical component of quality infrastructure as well as a growth driver for the real estate industry and the economy at large because of its strong linkages to about 300 industries.”

For this transaction, MUFG Bank, Ltd. (MUFG) is the Lead Social Loan Coordinator, and Mandated Lead Arranger and Borrowers (MLAB). Other MLAB and Joint Social Loan Coordinators include CTBC Bank, State Bank of India, Mizuho Bank, and Sumitomo Mitsui Banking Corporation.

HDFC’s Social Financing Framework is consistent with globally recognized social loan frameworks for sustainability financing market participants to certify, track, and monitor the social impact of financing assets.

At around 11.18 AM, HDFC was trading at Rs2,354 per piece, down by 0.27% from its previous closing of Rs2,360.40 on the BSE.