PNB Housing may raise $300 million via ECBs
KOLKATA | MUMBAI: PNB Housing Finance is looking to raise another $250-300 million through external commercial borrowing by November amid market turmoil and fear of a further squeeze in the liquidity system.
This will be the second external borrowing by the Delhi-based home loan lender in as many months although the company maintained that it has not faced any tightness in cash flow.
It had mobilised $200 million from overseas investors only last week. The company is also looking to securitise home loan pools worth Rs 1,000-1,500 crore which would help it free capital and lend more. “We have received commitments for $300 million external loans from overseas branches of local banks. We will utilise it partly or fully according to our requirement,” PNB Housings chief financial officer Kapish Jain said.
“We are in a good situation as far as liquidity is concerned,” he said. The cost of external borrowings including hedging prices comes cheaper by 25-40 basis points for it.
Reserve Bank of India allowed housing finance companies to raise up to $750 million from overseas investors through the automatic route for up to five years. Of this, just about $50 million of this can be short-term borrowing for three years.
Jain said PNB Housing borrowed nothing from local capital markets in September.
However, the company is looking to add more to its cash flows by securitising home loan pools worth Rs 1,000-1,500 crore in October itself as it has already received sanction letters from twothree large state-owned banks, said a person with knowledge of the matter. “We do securitise small portion of our assets under direct assignment route and sell to banks as part of our normal treasury management. We have securitised assets worth Rs 3,000 crore in the first half of this year,” Jain said. “We continue to do it as banks and non-banks show good interest to buy quality portfolios more so amid current spate of circumstances.” Jain declined to divulge details on the quantum of assets to be sold this month.
The market received a balm from SBI which announced its support for NBFCs by way of securitisation deals.