India?s leading petrochemical producer and refiner, Reliance Industries Ltd (RIL), is looking to price a $1 billion five-year loan at 150 basis points over Libor, a source familiar with the details of the plan said on Friday. The petrochemical giant has plans to start a roadshow for the loan intended for general corporate purposes next week, with stops in Asia and the Middle East , the source added.
RIL?s plan is pitted against the worldwide trend where offshore loan volumes in the first half slumped 23% to $9 billion from the same period in 2007, according to data from Reuters Loan Pricing Corp. This is because lenders are becoming more selective about funding.
However, overall syndicated loan volumes in India remain strong, having surged 57.1% to $21.4 billion so far this year compared to the 2007 period, according to Thomson Reuters data. Despite slowing domestic economic growth, Indian companies continue to expand, including via aggressive takeover acquisitions abroad.
Tata Motors, for example, obtained a $3 billion one-year bridging loan this year to support its acquisition of the Jaguar and Land Rover brands, in a deal that was arranged by a group of global lenders including Citigroup and Standard Chartered. RIL has mandated 17 banks to arrange the loan. They include Citigroup, ABN AMRO, Bank of Tokyo-Mitsubishi, Bayerische Landesbank, BNP Paribas, Calyon, DBS Bank, Fortis Bank, and HSBC, among others.