‘Indian firms will increasingly tap the US private debt market’

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: Stephen Monahan is the managing director and global head of debt private placement at Bank of America (BankAm). He has been leading the debt private placement team of BankAm for the past nine years and has been instrumental in making it a very strong unit of the bank's operations. In a freewheeling chat with FE, he spoke to Sitanshu Swain and Sunita Jyoti. Excerpts:

How does the Indian debt market fare vis-a-vis the US debt market? What needs to be done to develop the Indian debt market?

The US private debt placement market, which has originally been a credit intensive market, has been in existence for the past 40 years. However, there has been a great transformation of the US debt market in the past ten years, with standardisation of the documentation process. This has resulted in the US private placement market doubling to $40 billion in the last five years. Companies around the world are increasingly looking at tapping the US private debt placement market, as an important source of long term resource raising avenue. The Indian debt market is a relatively less developed market. Like every country around the world, the Indian debt market is facing a challenge to grow their local debt market. However, it is expected to evolve over a period of time.

How do US private debt investors look at India as an investment destination?

We have met the 50 largest institutional investors of the US private debt placement market and have introduced them to India Inc. India has been accepted as one of the emerging countries of the world by the US private debt investors. Recently, Reliance Industries has raised $300 million through the US private debt placement market through senior unsecured notes, placed for a period of 10 to 12 years with US insurance companies. This would be marked as the first deal of the emerging Asian market. The US private debt investors are looking at sectors like energy, infrastructure and transportation for further investment. Meanwhile, we have also started discussions with emerging companies in India to explain them the advantages of the US private debt placement market.

How would US private debt placement market excel over other traditional sources of borrowings?