Certus originated and structured one of India’s first securitization of wholesale RE loans

Oaktree’s US$195MM acquisition of RE loans aggregating to ~US$240MM from DHFL

Dewan Housing Finance Corporation Limited (“DHFL”, a US$20Bn housing finance company) was under liquidity stress, triggered by the Indian credit crisis that started with ILFS’ default in Sep 2018. Certus was appointed to help DHFL generate liquidity against its wholesale RE loan portfolio of ~US$2Bn+.

We undertook an accelerated review of this portfolio and selected gross underlying loans worth ~US$800MM+, primarily across three Mumbai based projects, as first phase. Above mentioned transaction (underlying gross loans: ~US$240MM), was the first one we undertook.

Few highlights:

  • Transaction done under RBI’s Debt Securitization Guidelines on ‘true sale’ basis and using listed, rated PTCs. One of the first of its kind for wholesale RE loans
  • One of the largest single investment by an institutional investor in residential real estate, in recent years
  • High-quality, near complete, underlying real estate project, belonging to a ~US$12Bn group
  • Complex transaction executed in just about 2 months (no. of underlying transaction documents executed pre-closure: 14)

* As on Mar 31, 2020

Post closure of the above, investor interests of ~US$290MM+ against other first phase projects were also received. However, DHFL itself moved towards a lender-controlled resolution and hence these discussions did not conclude.

Read full article on:  Business Standard | MintEconomic Times

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