Reliance In $250 Million Crossborder Loan Deal

Reliance Industries has entered into a landmark crossborder syndicated term loan facility for $250 million with ABN Amro Bank, ANZ Investment Bank, Credit Lyonnais and Standard Chartered Bank as mandated arrangers.

The loan is being raised to repurchase its outstanding bonds in the overseas market, with remaining maturities between three years and 25 years.

However the loan would actually be drawn in Japanese yen, and the proceeds will be used to buy back its own bonds with maturities ranging from 2005 to 2027. The general syndication is to be launched next week.

The loan would be raised at an all-in cost of 107 basis points over Yen Libor. This costs includes all swap costs, a RIL official explained to Business Standard. The loans will have an average tenure of 6 years, with half of it having a maturity of five and a half years, and the balance after six and a half years.

 

With this loans, Reliance will be able to bring down the weighted average tenure of its foreign currency borrowings as well as the price. Reliance Treasurer, Alok Agarwal said in a release: "On keeping with the Reliance group philosophy, it is a constant endevour of the group o pro-actively manage its external debt portfolio to reduce the weighted cost of debt."

According to sources, the loan would have an interest rate which is one of the lowest ever by any Indian corporate so far.

Reliance had earlier signed the first syndicated loan transaction for 2002 in January this year.