After $3 Billion, Reliance And Jio Raise $2 Billion Forex Loan: Report

The new loan of $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

RIL's last syndicated offshore borrowing was a $1.45 billion dual-currency financing completed in 2020, comprising a $1.1 billion 3.5-year piece and 38.45 billion yen five-year portion.

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Mukesh Ambani-led Reliance Industries (RIL) and its unit Jio Infocomm have raised $2 billion add-on foreign currency facility at most competitive rates, just few days after tying up with a $3 billion financing in India's most widely syndicated loan, the PTI reported. The $3 billion financing closed on March 31 and the add on $2 billion thereafter.

Citing sources privy to the development, the news agency said the fundraising is the largest through syndicated term loans by an Indian corporate house in at least five years. The primary syndication of $3 billion involved around 55 lenders, 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 $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. According to sources, the blowout response was not surprising considering the momentum the $3 billion borrowing had already generated in the senior phase by mid-January when it was launched into general syndication.

The oil-to-telecom conglomerate is one of the most sought-after credits from India and enjoys deep banking relationships. "This was visible from the remarkable response to the $3 billion loan, but also from the reception the $2 billion add-on has already received," a senior banker told PTI.

Eighteen banks, including the 15 senior MLABs of the $3 billion loan and others joining in the senior phase, are expected to form the syndicate for the $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.

MLAB refers to Mandated Lead Arranger and Book Runner.

The size of the add-on is two-thirds that of the original $3 billion loan, quite large and unusual in Asian loan markets for what is effectively an unplanned greenshoe option.

The decision to raise another $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. Nearly a third, $927 million, of the allocations went to 19 Taiwanese banks that dominated the final list of lenders in the syndicate while another eight from Japan took $276.36 million combined. The $3 billion borrowing is also split equally for Reliance and Jio, with the latter's portion being its first non-recourse loan.

Last year, Jio obtained a $750 million five-year new-money club loan for capital expenditure. RIL's last syndicated offshore borrowing was a $1.45 billion dual-currency financing completed in 2020, comprising a $1.1 billion 3.5-year piece and 38.45 billion yen five-year portion.

The yen loan offered an all-in pricing of around 78 bp – 81 bp, while the US dollar tranche paid an all-in of 101.5 basis point (bp) based on a margin of 79 bp over Libor and an average life of 3.25 years.

The $3 billion borrowing signed last week is Reliance group's largest syndicated loan and is split into $1.15 billion and 48.78 billion yen ($380 million) tranches with an average life of 5.25 years for RIL, and five-year portions of $1.2 billion and 41.81 billion yen for Jio.