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Published: Apr 5, 2023
Updated: Apr 5, 2023

Reliance and Jio raise $2 billion forex loan following successful $3 billion financing

Indian conglomerate Reliance Industries Ltd and its subsidiary Reliance Jio Infocomm have raised a $2 billion add-on foreign currency facility, just days after signing a $3 billion financing. The funding is the largest raised through syndicated term loans by an Indian corporate house in at least five years.

Successful syndication

The primary syndication of the $3 billion loan involved 55 lenders, including major global players such as Bank of America, HSBC, Citi, SMBC, Mizuho, and Credit Agricole, as well as nearly two dozen Taiwanese banks. An overwhelming response from the market led to the decision to raise another $2 billion, with 18 banks expected to form the syndicate for the add-on.

Impressive terms

The response to the loans was not surprising given the strong reputation and deep banking relationships of Reliance and Jio. The terms of the loans were also attractive, paying top- level all-in pricing of 146 bp and 156 bp for the US dollar portions for RIL and Jio, respectively, and top-level all-ins of 66.50 bp and 76.50 bp for the yen tranches.

Split equally

The $3 billion borrowing is split equally for Reliance and Jio, with the latter's portion being its first non-recourse loan. Meanwhile, the $2 billion add-on will also be split equally between the two companies. This is an unusual move for what is effectively an unplanned greenshoe option, and the loan's size is two-thirds that of the original $3 billion loan.

Reliance Industries Ltd's last syndicated offshore borrowing was a $1.45 billion dual- currency financing completed in 2020, comprising a $1.1 billion 3.5-year piece and a ¥38.45 billion ($380 million) five-year portion. The successful syndication of the recent loans suggests that Reliance and Jio remain highly sought-after credits in the Indian market