Lodha Group, Mumbai's realty major listed as Macrotech Developers, raised Rs 650 crore in debt facilities from Standard Chartered Bank and Deutsche Bank for three years to refinance its high-cost debt. Standard Chartered Bank provided Rs 245 crore at 9% payable annually, while Deutsche Bank provided Rs 405 crore at 9.5% payable quarterly. Deutsche Bank bonds are unsecured, whereas Standard Chartered bonds are secured.The Rs 245-crore NCDs offered to Standard Chartered Bank include a provision requiring the bank to charge Lodha 50 basis points more for each rating reduction. A basis point is equal to one tenth of a percentage point.

The interest rate on the Rs 405-crore NCDs subscribed to by DB is levied at a spread of 2.7% over the RBI's 90-day treasury bills. According to the bond's offer document, which was uploaded by the stock exchange, the spread on T-bills will be decreased by 25 basis points beginning in the December 2023 quarter. Even though it has added over a half-dozen new projects this fiscal year, the move to refinance debt is an attempt to lower overall debt.

During the June quarter, the developer added five projects with a potential GDV of Rs 12,000 crore in Mumbai's western suburbs, Bengaluru, and Alibaug. Based on the company's quarterly operating command, Lodha added two projects in the Mumbai Metropolitan Region (MMR) with a GDV of Rs 2,300 crore in the September quarter. "Our exit cost of debt as of June 2023 was 9.65%", stated Sushil Kumar Modi, CFO of Lodha. If the NCDs were raised to 9% to 9.5%, the overall interest expense would be reduced by 5-10 basis points. Standard Chartered Bank and Deutsche Bankdeclined to comment.