Reliance Industries has kicked off the new year with a fresh round of cross-border borrowings. The company has raised $110 million through the syndicated term loan route to prepay high-cost debt.
This is the first syndicated loan transaction in the calendar year 2002 by an Indian corporate.
Reliance is expecting to the loan to be priced within 100 basis points over Libor. It signed the refinance deal with the ANZ Investment Bank, BA Asia Ltd and Credit Lyonnais.
The latter is also the lead arranger and facility agent for the loan. The general syndication will be launched later in the month, according to a press release issued by Credit Lyonnais.
Ravindra Kumar, executive vice-president, corporate & investment banking, Credit Lyonnais said, "this is the first deal of 2002 and is expected to set a new benchmark in the market for five and a half-year maturity syndicated paper".
Alok Agarwal, treasurer, RIL, said "it is a constant endeavour of the Reliance group to pro-actively manage its external debt portfolio, amongst others, by refinancing expensive debt via lower cost borrowings. Reliance has always believed in achieving new benchmarks for its external debt raising, in terms of size, pricing and tenor. Needless to say, this transaction also sets a new benchmark for RIL paper for five and a half-year maturity".
The Reliance group had last year bought back over $150 million of its Yankee bonds and replaced them with syndicated loans in the offshore market. This provided it with the opportunity to prepay about Rs 2000 crores of term loans from banks to capture approximately 200 basis points of savings by placing bonds of the same maturity in the debt capital markets.
