Icici Plan To Raise $500m In Subordinated Debt Cleared

The finance ministry has approved Industrial Credit & Investment Corporation of Indias global medium term note (GMTN) programme aggregating $500 million. The financial institution proposes to kick off the programme with a $100 million subordinated floating rate note (FRN) soon.

The programme allows ICICI to tap the Asian, European and US markets on an ongoing basis with a variety of instruments of varying maturities in multiple currencies under a single comprehensive set of documentation.

ICICI, in a press release issued yesterday, stated that this is the first time that an Indian FI has received such an approval.

The release further states that the GMTN programme will help enhance ICICIs profile as a frequent borrower by ensuring its continuous presence in the international market.

 

The programme will also help ICICI to broaden its base of international investors and achieve flexibility in international borrowings by allowing it to quickly access brief windows of opportunity that open up in the dynamic international markets, said the release.

Other Asian financial institutions that have similar MTN programmes are the Industrial Finance Corporation of Thailand, Korean Long Term Credit Bank and the Korean Development Bank.

ICICI is the first Indian issuer to tap the international market for subordinated debt. The instrument is proposed to be structured as an FRN linked to the London Inter Bank Offered Rate (Libor) with a maturity period of 10 years.

According to the release, the subordinated debt issue will enhance ICICIs capital adequacy ratio without any equity dilution.