Citibank Arranges $430m Offshore Debt

Citibank arranged structured offshore debt aggregating $430 million during January to March 1997. The bank has just completed a $ 35 million facility to Taj International Hotels (HK), Hong Kong, a wholly owned subsidiary of the Indian Hotels Company, a member of the Taj group of hotels.

The five year bullet facility is structured at 60 basis points above Libor. The proceeds will be used by Taj International Hotels to redeem existing shareholders deposits in its books extended by Indian Hotels, in line with the approval received from the Reserve Bank of India. This structured facility, guaranteed by Indian Hotels, has been put together along with the Bank of Nova Scotia Asia.

 

Citibank has bookrun facilities for nine top issuers in India during the first quarter of the current year. They include Indian Petrochemicals Corporation (IPCL), Industrial Credit and Investment Corporation of India, Indian Aluminium, CESC, Hindalco, Bishnauth Tea and Ballarpur Industries.

The bank, which arranged structured offshore debt to the tune of $1.16 billion during the last four years, has considerably stepped up its business in syndicated loans during this year.

We expect our business to improve further with the relaxation of the ECB norms by the government, said Gunit Chadha, head, corporate finance and capital markets (India).

Corporates in India have not leveraged themselves enough and going in for structured off-shore debt makes more sense since it is cheaper, he continued.

Chadha expects corporates to increasingly borrow in the market through structured facilities.

Citibank has also arranged structured offshore debt worth $35 million for Owens Corning with an option to raise a further $25 million. The bank recently signed a deal with Hero Cycles to raise $18 million.

The IPCL euro-convertible bond credit enhancement which was placed at the end of February raised up to $210 million through a direct-pay letter of credit. This deal was co-arranged with BA Asia.