ICICI Bank Ltd has hired Goldman Sachs Group Inc. and Calyon among 10 firms to arrange the biggest borrowing by an Indian bank.
India’s largest lender to consumers, ICICI Bank is seeking a yen-denominated loan equivalent to $1.5 billion (Rs6,075 crore), said Calyon, the investment banking unit of Credit Agricole SA, in an emailed statement on Monday. HSBC Holdings Plc. and Natexis Banques Populaires are also among the arrangers that will invite other banks to join the financing, according to the statement.
The Indian lender is raising funds in yen to save on withholding tax because Japan has the lowest interest rate among major economies. The three-month yen London interbank offered rate (Libor), a benchmark for corporate borrowing, is at 0.8%. The comparable dollar rate was fixed at 5.36% on 3 August.
ICICI is seeking the cash to meet credit demand as bank lending in India grew 28% in the year ended 31 March, following an average of more than 35% in each of the preceding two years, according to central bank data.
The loan is divided into three equal portions, the statement shows. ICICI will pay an interest of 15 basis points more than the yen Libor rate for a one-year loan. A three-year borrowing will pay a premium of 38 basis points and a five-year portion will pay 55 basis points more than the Libor rate, according to the statement. A basis point is 0.01 percentage point.
In January, ICICI Bank had sold $2 billion of dollar-denominated bonds, the biggest debt sale by an Indian company. The bank has about $11.2 billion of loans and bonds outstanding, according to data compiled by Bloomberg.
The bank is rated BBB-, the lowest investment grade, by Standard & Poor’s and one level higher at Baa2 by Moody’s Investors Service.
In June, Goldman had helped ICICI Bank raise almost $5 billion in the nation’s biggest share sale. Bloomberg