Bank of India is seeking to raise as much as $400 million through its first dollar-denominated syndicated loan since 2012, signaling a growing appetite for global credit among Indian borrowers, Bloomberg reports.
The loan, split into three- and five-year tranches, is being marketed amidst a surge of Indian companies tapping international debt markets.
The Indian lender is conducting the borrowing through its branch located in Gujarat International Finance Tec-City (GIFT City), India’s newest financial hub. CTBC Bank Co. and Standard Chartered Plc are the arrangers for the facility, according to sources familiar with the matter who requested anonymity due to the private nature of the discussions.
While a Bank of India spokesperson acknowledged receiving a request for comment, no further details were immediately provided.
This move by Bank of India comes as several other major Indian companies are also turning to foreign currency debt this year. Reliance Industries Ltd. is reportedly seeking to borrow up to $3 billion, which could be the largest loan from the country since 2023. Shriram Finance Ltd. is also planning to syndicate a portion of a $1.28 billion multi-currency social financing deal, the largest ever offshore transaction by an Indian shadow lender.
Adding to the trend, State Bank of India is currently marketing a ¥30 billion ($191 million) syndicated loan and plans to raise another borrowing of up to $1.25 billion. This potential transaction would represent the largest dollar-denominated loan from the Indian banking sector this year.
These activities contribute to a burgeoning deal pipeline in Asia Pacific, potentially signaling a rebound in loan volumes after three years of decline.
Bank of India’s return to the offshore loan market marks a significant shift from its previous strategy. Its last venture in 2012 saw it raise $200 million with a two-year facility at an interest margin of 175 basis points over the London Interbank Offered Rate (LIBOR).
The current loan is being offered at a markedly lower cost. It pays a margin of 83 basis points over the risk-free Secured Overnight Financing Rate (SOFR) for the three-year tranche and 96 basis points for the five-year portion, the sources said.
The proceeds of the latest loan, which has a base size of $300 million split equally across the two tranches, will be used for general corporate purposes, including supporting lending activities, according to the people familiar with the deal.
