State Bank of India Plans $1.25 Billion Loan, Set to Be 2024's Largest Dollar-Denominated Deal
State Bank of India, the country's largest PSU bank plans to borrow up to $1.25 billion, in what would be the largest dollar-denominated loan from the country’s financial sector this year, according to people familiar with the matter.
CTBC Bank, HSBC Holdings Plc, and Taipei Fubon Bank are arranging a five-year loan, which will have an interest margin of 92.5 basis points above the risk-free Secured Overnight Financing Rate, according to sources who requested anonymity due to the confidential nature of the matter.
India’s top lender is raising the facility for general corporate purposes through its branch at the Gujarat International Finance Tec-City, the country’s newest financial hub, the people said, adding that the deal is being syndicated to other financiers. SBI didn’t respond to requests seeking comment.
State Bank joins several other local borrowers in raising foreign currency debt this year. Non-banking finance companies, or so-called shadow banks, in particular, have increasingly tapped dollar-denominated facilities amid stricter regulations at home.
Cholamandalam Investment & Finance Co. is the latest Indian non-banking finance company to seek a $300 million syndicated term facility. Elsewhere, local financier Union Bank of India’s Sydney branch is marketing an A$125 million ($81 million) three-year loan, while Bank of Baroda is raising a $750 million borrowing.
Despite the surge in activity, India’s dollar loan volume has declined by 27% to $14.2 billion this year, primarily due to the lack of large corporate borrowings, according to data. In July, the State Bank of India raised a $750 million, three-year loan, as per the same data.
