Sail Ties Up $100m Ecb Issue At Libor Plus 60 Bps

Steel Authority of India Ltd (SAIL) has succeeded in tying up a $ 100 million ECB issue at 60 basis points over Libor for a ten-year term.

In banking circles, this is considered one of the finest deals that an Indian corporate has got in recent times in the foreign currency loan market.

Sumitomo Bank received the mandate for the issue over the other contender , Credit Lyonnais, which had quoted 65 basis points over Libor as its offer.

According to a banking source, there is a likely call and put option after seven years.

Sail, with its heavy, ongoing capital expenditure projects, is also planning a $ 100 million Yankee bond later this year.

 

Earlier this year, Industrial Development Bank of India (IDBI) had contracted a seven-year loan at an all-in cost of 60 basis points.

The ten-year loan of SAIL compares more favourably to the line of credit received by IDBI.

Bankers attribute the fall in prices to the growing demand for Indian paper from international banks.

This demand has only increased in the past year with banks from Asian countries like Japan, South Korea and Taiwan becoming more aggressive in the Indian syndicated loan market. IDBI, in fact, has recently received permission from the finance ministry to refinance a five-year syndicated $ 100 million loan drawn in 1995 with a cheaper loan at an all-in cost of 30 basis points over Libor for 2 years.