Reliance Industries, Jio Infocomm raise a total of USD 5 bn
Largest Syndicated loan in India’s corporate history!
The fundraising by the group led by Asia’s richest man Mukesh Ambani is the largest syndicated loan in India’s corporate history.
What is a syndicated loan?
A syndicated loan is financing offered to a borrower by a group of lenders — referred to as a syndicate.
Reliance last week raised USD 3 billion from 55 banks and Reliance Jio Infocomm secured additional credit of USD 2 billion from 18 banks, sources aware of the development told PTI. The USD 3 billion financing closed on March 31 and the add-on facility of USD 2 billion was secured on Tuesday.
Use of Funds:
Reliance Industries will mainly use this fund to boost capital expenditure, while Jio would use the money towards expanding nationwide 5G network rollout. The USD 2 billion add-on funding will be divided equally between RIL and Jio and is likely to be wrapped up by the end of April, the PTI report said citing sources.
The primary syndication funding of USD 3 billion has around 55 lenders involved, including nearly two dozen Taiwanese banks as well as global giants such as Bank of America, HSBC, MUFG, Citi, SMBC, Mizuho, and Credit Agricole. The new loan of USD 2 billion has the same terms as the borrowing signed on March 31 with 55 lenders, including 40 that joined in two phases of syndication.
Eighteen banks, including the 15 senior MLABs (Mandated Lead Arranger and Book Runner) of the USD 3 billion loan and others joining in the senior phase, are expected to form the syndicate for the USD 2 billion add-on, which is split equally for Reliance and Jio, and is likely to be wrapped up by the end of the month.
The decision to raise another USD 2 billion stems from the overwhelming response from the market as lenders remain hungry for the blue-chip group that has not been active in the syndicated loan market in recent years. The USD 3 billion borrowing is also split equally for Reliance and Jio, with the latter’s portion being its first non-recourse loan.
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