Idbis Floating Rate Note Issue Oversubscribed

The Industrial Development Bank of India (IDBI) has received a good response for its 4-year $100 million floating rate note (FRN) issue. The issue was oversubscribed to the extent of $46 million and was priced at 85 basis points over the London interbank offer rate (Libor). The issue was lead managed by Barclays Capital Asia Ltd and the funds were drawn down on May 17, 2000.

The funds were used to prepay an existing syndicated loan that IDBI had raised at a coupon of 150 basis points over Libor. No prepayment premium was paid on the earlier loan. The four-year maturity of the FRN issue is in line with the residual 4-year maturity on the syndicated loan. IDBI expects to realise interest savings of about Rs 7 crore from the prepayment of the syndicated loan according to a statement issued yesterday.

The transaction evoked a response from 18 international institutions and banks making a total commitment of $146 million against the issue size of $100 million of the syndicated being refinanced necessitating a scaling down of the allotment to participating banks, the IDBI statement said.