Indian property companies, which have been increasingly relying on shadow banks for borrowing, are struggling to roll over debt as the lenders themselves are facing a cash squeeze, raising prospects of a wave of defaults. A default by non-bank financier Dewan Housing Finance Corp. has also rattled investors this year.
Macrotech has in place arrangements to repay all of the $325 million of bonds, according to an emailed comment from a company spokeswoman. That includes $150 million to be raised via the refinancing of London real estate
inventory; a $100 million line from a family office and around a $70 million surplus from the sale of a commercial building in India. Moody’s downgrade won’t have an impact on the company’s India business, according to Macrotech.
Moody’s, which has a negative outlook on Macrotech Developers’ rating, said the company’s two facilities -- secured against unsold inventory of London projects - are its primary source to refinance its upcoming bonds. However, as the facilities cannot be drawn down immediately, and are subject to conditions, “liquidity risk remains elevated,” it added.