Reliance Industries Secures $3 Billion In Dual-Currency Loan From 11 Banks: Report

The $3 billion loan is mainly aimed at refinancing existing debt maturing in 2025. Additional banks are expected to join the syndication later this quarter

The oil-to-telecom conglomerate is gearing up for significant loan repayments in 2025

Source : PTI

Reliance Industries Limited (RIL), India's largest company by revenue, has secured $3 billion in funding from a consortium of 11 banks, according to a report in The Economic Times. This marks the company's largest borrowing deal in nearly two years.

The five-year loan, finalised last month, is priced 120 basis points above the three-month Secured Overnight Financing Rate (SOFR), with $450 million in Japanese yen.

The oil-to-telecom conglomerate is gearing up for significant loan repayments in 2025. A source cited in the report mentioned that RIL has already utilised $700 million of the loan and plans to access additional funds as needed in the current quarter.

In mid-December, the three-month SOFR rate was approximately 4.80 per cent. With an added 120 basis points, the dollar-denominated portion of the loan is priced at around 6 per cent. Meanwhile, the yen-denominated segment of the loan is priced 75 basis points above the three-month Tokyo Interbank Offer Rate (TIBOR), the benchmark rate in Japan.

According to the report, a source revealed that the dual-currency loan agreement, involving both US dollars and Japanese yen, was finalised last month.

The $3 billion loan is mainly aimed at refinancing existing debt maturing in 2025. Additional banks are expected to join the syndication later this quarter, which will help the lenders manage risks more effectively and increase their lending capacity to Reliance Industries, the report added.

Bloomberg data indicates that Reliance Industries (RIL) has approximately $2.9 billion, including interest payments, due in 2025. The company sought this loan to strengthen its financial flexibility.

Major Banking Partners

According to a document, Bank of America holds the largest share of the loan at $343 million. Other significant participants include DBS Bank and HSBC, each contributing $300 million, Japan’s MUFG with $280 million, and India’s State Bank of India with $275 million. Japanese banks Standard Chartered, Mizuho Bank, and SMBC each have $250 million in exposure. First Abu Dhabi Bank, Citibank, and Credit Agricole CIB have each provided $241 million, the report noted.

This recent deal mirrors the dual-currency dollar-yen loan RIL raised in late 2022, which generated considerable interest from global banks. That earlier loan expanded from an initial $3 billion target to $5 billion after receiving approval from the Reserve Bank of India.

Reliance Industries is India's highest-rated corporate borrower, holding a BBB+ credit rating with a stable outlook from S&P, surpassing India’s BBB- sovereign rating.