Reliance Refinances $500m Debt

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MUMBAI: In one of the biggest re-financing deals by an Indian corporate, Reliance Industries on Tuesday concluded a loan syndication to refinance a $500m loan.

About 20 banks, including the Development Bank of Singapore, participated in the deal, sources said. The amount was reportedly raised by Reliance Petroleum in ’01, but this could not be confirmed.

The interest on the original loan was in the form of a rising interest with lower rates at the start of tenure. While the earlier loan was at Libor plus 150 points, the refinancing has been done at Libor plus 90, resulting in savings of 60 basis points, sources said.

Reliance has been retiring expensive debt taken in the high interest regimes of the past. One of the largest earlier efforts was in ’02, when it approached the market to raise a $107m Japanese yen loan to refinance bonds.

PS:

0.6% = US$3 million/year in savings or Rs. 14 crore!