Debt

Debt financing

State-run lenders SIDBI, NABARD, NaBFID plan $2-B in overseas borrowing

Business Standard  

Several Indian state-run financial institutions are planning to raise up to $2-B in overseas loans by using a central bank facility that offers concessional borrowing rates. The Small Industries Development Bank of India (SIDBI) is currently in talks with the International Finance Corporation (IFC) to raise $1-B across five-year and seven-year tenors.Additionally, the National Bank for Agriculture and Rural Development (NABARD) and the National Bank for Financing Infrastructure and Development (NaBFID) are preparing to raise approximately $500-M each.These planned borrowings are intended to secure long-term USD funding at lower costs. The institutions are targeting an all-in borrowing cost of less than 7%.These initiatives follow a decision by the Reserve Bank of India (RBI) on June 5, which allows government-owned firms to access a swap facility that reduces currency-hedging costs by approximately half compared to prevailing market rates.