Hudco set to raise $500 m debt from global investors
Hudco is in the international debt market with a benchmark dollar bond sale to raise at least USD 500 million as part of its medium-term note (MTN) programme.
State-owned Housing and Urban Development Corporation (Hudco) is in the international debt market with a benchmark dollar bond sale to raise at least USD 500 million as part of its medium-term note (MTN) programme. The MTN programme has been assigned Baa2 by Moody's and 'BBB- by Fitch Ratings. According to investment bankers, Hudco is looking to raise at least USD 500 million in dollar debt from international investors. Hudco could not be contacted for more information.
"The ratings is supported by the company's unique low credit risk business model, wherein its lending is almost entirely to state governments' entities and very high capital as well as healthy profitability," Moody's said in a note. The rating also factors in the company's relatively weak funding and liquidity profile, as seen in its dependence on wholesale sources of funding and little surplus liquidity on the balance sheet, Moody's said in a note Wednesday.
Meanwhile, rival agency, Fitch Ratings also assigned a final rating of BBB- on the MTN programme and said the rating is contingent on the receipt of details regarding the amount, coupon rate and maturity.
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The company's BCA could be upgraded if there is a significant and sustained improvement in its liquidity profile, particularly an increase in excess liquidity on its balance sheet to buffer against potential adverse market conditions, Moody's said. Hudco accepts deposits and provides housing finance. It is regulated by the National Housing Bank.
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