Trump Tower Builder in Mumbai Skirts Default as Bond Repaid
Scrutiny had piled onto the company in recent months after a rating downgrade deeper into junk territory.
(Bloomberg) -- India’s top builder has met a keenly watched debt deadline, even as it grapples with a real estate downturn and more borrowings coming due this year.
Lodha Developers International Ltd. said it has repaid $324 million of bonds maturing Friday. Scrutiny had piled onto the company in recent months after a rating downgrade deeper into junk territory. Any stumble could have led to one of India’s largest offshore bond defaults.
Lodha, which is building the Trump Tower in Mumbai, is hardly alone in facing an increasingly harsh environment. The country’s slowing economy has dragged down property market demand. On top of that, a lingering shadow banking crisis has made it hard for both home buyers and developers to get money.
The builder has “completed all requirements and payments for the bond to be repaid in full along with accrued interest,” Abhishek Lodha, CEO of Macrotech Developers Ltd., which is the flagship of the Lodha group, said in a statement. “Despite the economic slowdown in India, which has been further compounded by factors like coronavirus and the oil price shock, we are pleased that we have successfully completed this obligation.”
The company managed to sell a $200 million bond earlier this month, despite broader global credit market pain amid the coronavirus pandemic. The proceeds from that note sale, along with other funds, were used to repay the maturing security.
There were stumbles along the way, though. In the bond sale earlier this month, Lodha fell short of the top end of a fundraising range. It then rushed this week into a last-minute tap of that offering to bring in an additional $25 million.
The complex refinancing deal also entailed Lodha needing to meet conditions involving setting aside cash before it could use the proceeds of the debt offering.
Moody’s Investors Service had said earlier this month that while the real estate developer may be able to fend off its near-term debt maturity, refinancing risks remain high.
--With assistance from Anto Antony.
To contact the reporters on this story: Rahul Satija in Mumbai at rsatija1@bloomberg.net;Bijou George in Mumbai at bgeorge66@bloomberg.net
To contact the editors responsible for this story: Arijit Ghosh at aghosh@bloomberg.net, Jeanette Rodrigues, Andrew Monahan
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