Hdfc Strikes Yen12 Bn Five-Year Loan

Housing Development Finance Corporation Ltd (HDFC) has concluded a Japanese yen 12 billion (equivalent of $100 million) five-year syndicated term loan with a bullet payment facility. The loan is to broad-base the corporation's medium to long-term funding sources and also to reduce its borrowing costs.

This external commercial borrowing (ECB) is unsecured and carries a rate of interest of 0.75 per cent per annum over the six month Japanese Yen (JPY) Libor for the first two years and 0.85 per cent per annum over the six month JPY Libor for the remaining three years.

Despite the lowering of the sovereign rating outlook for India as well as the recent turmoil in the international markets, HDFC received total commitments of JPY 25.7 billion, while total allocation of the 12 participating banks and financial institutions was JPY 12 billion.

State Bank of India (SBI) was mandated arranger to the issue. Development Bank of Singapore and RZB Austria joined the facility as co-lead arrangers. SBI was also the agent for lenders. Of the total allocation of the12 participating banks and financial institutions, 27 per cent was from Europe, 25 per cent from West Asia, 25 per cent from South-East Asia and 23 per cent from India.

"Though the ECB issue was unrated, international investors gave an overwhelming response to it. This shows the confidence of overseas investors in the corporation," Deepak Parekh, chairman, HDFC said.

He pointed out that as no JPY-rupee loan swap exists, HDFC had entered into counter-party agreements to cover itself fully against any adverse movements in exchange rates.

Meanwhile, HDFC today concluded a five year Rs 100 crore term-loan at a fine interest rate of 9.19 per cent per annum. HSBC was the sole arranger to the issue.