|
IOC’s
Rs 400-cr floating rate loan oversubscribed
Our
Banking Bureau
Mumbai, Nov 19: Indian Oil Corporaton (IOC) has completed
a rupee term facility structured on the lines of offshore
syndicated term loan facility. A number of public sector,
private sector and foreign banks were tapped for the syndicated
term, which was, incidentally, India’s first rupee term facility.
|
STRUCTURED
DEAL
|
• The deal was India’s first
rupee term facility and is
similar to foreign currency
syndicated loan
• Uniform pricing benchmark
and common documentation
for lenders were the features
• The interest rate is benchmarked to the 3-month
CP
reference rate.
• Interest is payable and reset quarterly at the
benchmark
rate plus a margin of 25 bps |
Standard Chartered Bank (StanChart) was
the mandated as the lead arranger and book runner and Union
Bank of India was the joint arranger. The syndication has
been over-subscribed with confirmed committments from 11 banks.
The Rs 400-crore issue was conceptualized on the lines of
a foreign currency syndicated loan transaction in the overseas
markets. The uniqueness of the term loan facility lies in
the uniform pricing benchmark and the common documentation
for all term lenders.
This is also the first time that an Indian issuer is raising
loan funds in the domestic market linked to an investment
benchmark like the commercial paper (CP) reference rate usng
a floating rate structure.
The underlying facility is a one-year unsecured, term loan
where the interest rate is benchmarked to the three-month
CP reference rate. The interest will be payable and reset
quarterly at the benchmark rate plus a margin of 25 basis
poiints (bps).
|
