RIL to raise $1.75-bn syndicated term loan

This comprises $1.2 bn to refinance the current outstanding multi-currency facilities and $550 mn to fund new facilities

Mukesh Ambani-promoted Reliance Industries Ltd (RIL) has signed an agreement with 19 banks to raise a $1.75-billion syndicated term loan to finance its capital expenditure in India and new projects in its refining and petrochemical businesses.

This comprises $1.2 billion to refinance the current outstanding multi-currency facilities and $550 million to fund new facilities.

RIL had raised $800 million earlier this year. Indian companies have already raised a record $11.9 billion in foreign loans so far this year, compared with $4.3 billion a year ago.

The $1.2-billion refinancing tranche of the loan has a total maturity of five years and the $550-million tranche of the loan has a seven-year maturity, representing the longest maturity for an unsecured syndicated loan of similar size in Asia this year.

The five-year tranche has been raised at London Interbank Offered Rate (Libor)-plus 1.45 per cent and the seven-year tranche has been raised at Libor-plus 1.63 per cent.

“The rates are competitive and attractive. The ability to get a group of 19 banks to finance RIL shows the kind of credibility RIL enjoys in the market,” said Asit Bhatia, managing director and co-head of investment bank, Bank of America-Merrill Lynch.  

RIL said in a press statement it was the largest unsecured syndicated loan by an Indian company with tenure in excess of five years in the last three years.

The deal has been oversubscribed even before being launched into syndication.

“RIL continues to set new records in terms of competitive pricing and size of the deals in spite of turmoil in the Indian markets. In fact, this is a reaffirmation of confidence that the international banking community still has in India, specially in RIL,” said Alok Agarwal, chief financial  officer, RIL.

What also helped was the BBB+ rating, two notches above the sovereign rating, accorded by S&P, said RIL.

The facility has been fully underwritten by an initial group of 19 core relationship banks that comprise the mandated lead arrangers (MLAs).  

The 19 MLAs for the facility are Australia and New Zealand Banking Group Limited; Bank of America; Barclays Bank Plc; The Bank of Nova Scotia Asia Limited; The Bank of Tokyo-Mitsubishi UFJ; BNP Paribas; Citigroup Global Markets Asia Limited; Commonwealth Bank of Australia, Singapore branch; Crédit Agricole Corporate and Investment Bank; DBS Bank Ltd; DNB Asia Ltd; The Hongkong and Shanghai Banking Corporation Limited; Mizuho Bank Ltd; The Royal Bank of Scotland Plc; Standard Chartered Bank; State Bank of India; Sumitomo Mitsui Banking Corporation; United Overseas Bank Limited and Westpac Banking Corporation.