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HDFC set to upsize offshore loan to $1 billion as ECB rules eased

July 11, 2022

HDFC set to upsize offshore loan to $1 billion as ECB rules eased
Housing Development Finance Corp is set to become the first Indian borrower to take advantage of the central bank’s relaxed norms on external commercial borrowings, upsizing its foreign loan to around $1 billion from $750 million earlier, people familiar with the matter told ET. Funding costs will remain the same.

The State Bank of India(SBI) is said to join the syndication process that already has confirmed participation from Mizuho Bank, MUFG and Standard Chartered Bank, the people cited above said.

The proceeds will be used by the country’s biggest mortgage lender to lend to buyers of low-cost affordable homes.

The loan term has been finally fixed at three years. The loan could be priced after adding about 115 basis points over the Secured Overnight Financing Rate (SOFR), a global rate gauge. One basis point is 0.01%.

“Both the borrower and banks are discussing the matter, and the deal is closing now,” said an executive involved in the exercise.

The central bank last Wednesday announced a slew of measures to shore up depleting forex reserves and arrest the rupee’s fall against the dollar. It created additional space for companies tapping the offshore loan market, raising the ceiling on the external commercial borrowing (ECB) vehicle to $1.5 billion from $750 million now.

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