Piramal Capital and Housing Finance (PCHF) and PHL Fininvest Pvt Ltd (PHLF) will issue Pass Through Certificates (PTCs) offering 10.50 per cent through a special purpose vehicle called ‘Master Trust 2019 Series I’.
The Piramal Group’s real estate financing arms are in the process of raising about Rs 2,400 crore through a structured debt deal that will offer a new credit line to billionaire Ajay Piramal’s two financial services companies focused on the property business.
Piramal Capital and Housing Finance (PCHF) and PHL Fininvest Pvt Ltd (PHLF) will issue Pass Through Certificates (PTCs) offering 10.50 per cent through a special purpose vehicle called ‘Master Trust 2019 Series I’. For the Piramal companies, a large corporate group is said to have given its investment commitment to the PTCs, market sources said.
“The Piramal Group is likely to have sealed the deal through this structured funding, which would be a huge support for such borrowers that were looking to raise money,” a senior executive with knowledge of the matter told ET.
The instruments are rated AA+ (SO) by rating company CRISIL. SOs, or Structured Obligations are an additional support to an entity’s creditworthiness. Investors would receive interest payments on a monthly basis.
PCHF and PHLF are group companies of the listed entity, Piramal Enterprises Ltd.
These PTCs are backed by a pool of corporate loans given by both companies. Normally, retail loans are linked to structured deals. These would be one of the few rare deals where institutional loans have formed the pool.
The transaction is backed by a pool of 52 loans from 33 unique groups. The top 10 groups account for 62 per cent of the total loan pool, which is concentrated in Mumbai, the National Capital Region (NCR), and Chennai. More than 80 per cent of the loans are in the property sector, CRISIL said in its rating rationale.
Catalyst Trusteeship Ltd has been appointed the trustee to monitor the transaction on behalf of investors in these PTCs.
Non-payment of monthly interest or principal will not be construed as default on the PTCs, which would mature in the next two-and-a-half to six years. The investments would be categorised as default only if investors do not receive interest payments and principal in full by the final maturity date.