REITs and InvITs permitted to issue Debt Securities
SEBI (Real Estate Investment Trusts) Regulations, 2014 (“REIT Regulations”) and SEBI (Infrastructure Investment Trusts) Regulations, 2014 (“InvIT Regulations”) were amended vide notifications dated December 15, 2017. The said amendments, inter-alia, clarified that REITs and InvITs can issue debt securities.
Subsequently, SEBI issued a circular permitting Real Estate Investment Trusts (“REITs”) and Infrastructure Investment Trusts (“InvITs”) to issue debt securities subject to the following conditions and compliance of SEBI (Issue and Listing of Debt Securities Regulations), 2008 (“ILDS Regulations”):
Further, REITs/ InvITs shall be required to appoint 1 (One) or more debenture trustee(s) registered with SEBI under SEBI (Debenture Trustees) Regulations, 1993 prior to issue of any debt security.
Any secured debt securities issued by REITs/ InvITs have to be secured by the creation of a charge on the assets of the REIT/ InvIT or holding company or SPV, having a value which is sufficient to repay the principal amount together with interest thereon.