Mumbai, Aug 02: State Bank of India and ANZ Investment Bank have concluded the syndication of a $100m five-year loan facility for Indian Petrochemicals Corporation (IPCL) at an average cost of 121 basis points over the London Inter-Bank Offered Rate (Libor).
Banks that have participated in the syndication are Emirates Bank, Bumiputra Commerce Bank (Malaysia), National Bank of Kuwait, Syndicate Bank, Bank Muscat International, SBI International (Mauritius), Indian Overseas Bank and Mizuho Financial Group. Road shows were held in Dubai and Singapore and the facility was signed in Mumbai on Thursday.

The loan carries a coupon of 105 basis points over Libor during the first two years of its tenor and 131 basis points over Libor in the next three years. “This is IPCL’s maiden borrowing in international markets following its privatisation and the success of the transaction demonstrates not only IPCL’s fundamental operating and financial strengths but also the high level of confidence in the Reliance group,” said Alok Agarwal, president (finance), Reliance.

A number of corporates have been raising foreign currency borrowings to take advantage of the low interest rates in overseas markets. The strengthening rupee and low forward premiums have also helped. GE Capital, for the first time, tapped the ECB market last month to raise $50m through a 5-year loan for which Barclays Capital was the sole arranger.
The borrowing was made without any guarantee from its parent. HDFC Bank also raised $50m one-year loan last month with a greenshoe option of $25m at an all-included cost of 44 basis points over Libor. BA Asia, Natexis Banques Populaires and RZB-Austria were the arrangers.
Bureau Report