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Tuesday, September 17, 2013

YES Bank raises $225 m using swap loan facility

YES Bank has become the first bank to raise funds overseas using the swap loan facility provided by the Reserve Bank of India (RBI) last week.

The private sector lender raised $255 million ($180 million and €58 million) by way of dual currency, multi-tenor syndicated loan facility.

RBI, on September 10, had announced that banks can raise funds overseas above 50 per cent of their Tier I capital with a minimum maturity of three years and swap these borrowings with the central bank at a concessional rate for one to three years.

A Treasury head of a private sector bank had said that this facility could bring in dollar inflows to the tune of $10-15 billion.

“The facility has a maturity of one and two years with majority commitments coming in the two-year tenure bucket. The loan has been distributed with commitments from 11 banks representing eight countries across US, Europe, Middle East and Australia. The facility shall be utilised for general corporate purposes and trade finance,” YES Bank said in a statement.

According to the bank: “The recent RBI guidelines on offering swap facility to banks, for their FCY borrowings, at 100 bps below the market rate, will further make the landed rupee cost (or the effective interest rate) of these funds extremely competitive vis-a-vis rupee funds of equivalent maturity.”

The lead arrangers and book-runners for the transaction are ANZ Banking Group, Citigroup Global Markets Asia, HSBC, Standard Chartered Bank and State Bank of India.

Source: thehindubusinessline


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