ICICI Bank has arranged a $1.45 billion syndicated offshore loan as Indian banks accelerate dollar funding ahead of the RBI’s swap window closing, signalling a busy period for offshore credit amid strong domestic growth.
ICICI Bank has arranged a syndicated offshore borrowing of about $1.45 billion as Indian lenders move quickly to tap dollar funding while a Reserve Bank of India support window remains open. People familiar with the deal told Bloomberg that the private-sector lender initially signed for about $1 billion with Bank of America before expanding the transaction with other banks.
The four-year loan carries a margin of 110 basis points over the Secured Overnight Financing Rate, the people said. Mizuho Bank, Mashreqbank and United Overseas Bank are among the lenders taking part, and the syndication could still grow further if more banks join on the same pricing, according to the same people.
The deal comes after ICICI sold $1 billion of five-year bonds last month, its first return to international debt markets in nearly a decade. Bloomberg reported that the lender has also been in discussions about another $500 million offshore bond issue, underscoring its push to benefit from cheaper foreign borrowing.
The rush reflects a wider trend among Indian banks since the RBI introduced a concessional dollar-rupee swap facility on June 8. The central bank set the annual swap rate at 1.5% to reduce hedging costs for banks and state-run firms, with the window due to close on December 31, prompting borrowers to move quickly into the dollar market. Central bank data showed Indian banks had raised $2.58 billion from dollar bonds and loans from the start of the scheme through the end of July.
ICICI’s latest borrowing also follows a stronger-than-expected quarterly profit report, helped by loan growth of nearly 20%. For Indian lenders, the combination of firm credit demand at home and an official incentive to lock in foreign currency funding abroad has created one of the busiest offshore borrowing periods in years.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
