The Housing Development Finance Corporation has signed an agreement with the International Finance Corporation for a loan of $200 million, the company said in a statement on Friday.

It will shortly draw down the loan, which has two tranches.

IFC, an arm of the World Bank, will directly lend the first tranche of $100 million and shortly place the second tranche of $100 million with the leading international banks.

The first tranche has a bullet maturity at the end of eight years and the interest rate is one percentage point over the six-month LIBOR.

The loan is expected to broadbase HDFC's medium-to-long-term funding sources and reduce its overall cost of funding.

HDFC will hedge the foreign exchange risk arising out of the borrowing through suitable risk management.