Cross-Border Financing Brings $13,000m In 6 Yrs

The latest arranger league table, which is seen by the syndicated loan market as a tabulation of the amount lent by banks, reveals that ANZ Banking Group tops the group as the main institution to raise foreign currency for Indian corporates in the post-liberalisation period.

The exact amount raised through cross-border finance for India between January 1990 and July 1996 stands at $13,982.70 million.

ANZ Grindlays Bank officials, linked with the specialist finance and global syndications division were in the city this week to sign the deal for ICICI successfully raising $120 million syndicated term loan from the international markets.

 

According to London-based Chris J Vermont, director and head, specialist finance and global syndications, ANZ Grindlays, the scenario for the syndicated loan market has become more aggressive leading to the slide in the pricing band.

Vermont said that even in the current political uncertainty, global banks continue to look favourably towards India. Banks have positioned themselves topmost for India, just alongside China, he said.

The latest study reveals that ANZ Banking Group topped the list by raising successfully $4,170.84 million between January 1990 and July 1996, gaining the largest share of 29.83 per cent.

This was followed by Citicorp with a share of 11.30 per cent, while raising $1,580.25 million in the same period. This was followed by Fuji Bank with a 7.60 per cent share in cross-border financing, raising $1,062 million.

State Bank of India occupies a place in the top ten, having raised $ 821.46 million, managing for 5.87 per cent of the total share.

The other leading banks like Chase Manhattan Bank, BZW and Bank of Tokyo were in the list with a share of 7.58 per cent, 6.05 per cent and 5.69 per cent.

In the syndicated loan market, several changes have been witnessed in recent times for India.

One of the key changes coming in is that the classical small syndication of banks is not witnessed anymore. The less widespread structure of the banks is breaking down, Vermont said.

ANZ is one of the banking groups which adopts the new approach of contacting a total population of nearly 150 institutions (including arrangers, co-arrangers, sub-underwriters, lead managers) for the signing of a deal typically like the ICICI loan.

According to him, keeping in view the early entry strategy into the bidding process, banks have to bid more aggressively to remain within the top bracket. ``With this aggressive approach by banks, the sole purpose would be to bag the mandate at the lowest rate,'' he said.

The ICICI facility, was launched at $75 million and was substantially oversubscribed, finally raising $120 million through a syndication of 13 banks across 10 countries.

Vermont said that the appointment of P Chidambaram as the finance minister as come as a positive factor to instil faith in the system for the international community.