ICICI Bank is seeking to raise around $1.45 billion through a four-year syndicated offshore loan, up from an initial $1 billion deal with Bank of America.
The fundraising comes as Indian banks take advantage of the RBI's concessional forex swap facility, which offers a fixed 1.5% annual rate for qualifying foreign-currency funding.
The loan follows ICICI Bank's $1 billion five-year dollar bond sale last month and comes amid a broader rush by Indian lenders to tap offshore markets before the RBI facility expires on December 31.
ICICI Bank’s $1.45 Billion Dollar Bet: Why It’s Raising Big Offshore
ICICI Bank is looking to raise $1.45 billion through a syndicated offshore loan as Indian lenders rush to tap cheaper dollar funding before the RBI's concessional forex swap window closes
Summary
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India’s ICICI Bank is seeking to raise about $1.45 billion through a syndicated offshore loan, Bloomberg reported, as the private lender steps up foreign-currency fundraising amid favourable funding conditions created by the Reserve Bank of India.
The Mumbai-based lender initially agreed to a $1 billion four-year loan with Bank of America. The transaction is now being expanded to include Mizuho Bank, Mashreqbank and United Overseas Bank, according to people familiar with the matter cited by Bloomberg.
The four-year facility carries a margin of 110 basis points over the US benchmark Secured Overnight Financing Rate (SOFR). Additional lenders could join the syndication, potentially pushing the total size higher while retaining the same pricing, the people said.
The International Financing Review first reported details of the transaction.
ICICI Bank, Bank of America, Mizuho Bank and Mashreqbank did not immediately respond to requests for comment, while United Overseas Bank declined to comment, Bloomberg reported.
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RBI Facility Drives Dollar Fundraising
ICICI Bank's latest borrowing comes as Indian lenders accelerate their access to offshore debt markets following measures introduced by the RBI in June to encourage foreign-currency inflows and support the rupee.
Under the central bank's concessional foreign-exchange swap facility, banks can access funding at a fixed annual rate of 1.5% for an average maturity of at least three years. The facility is available until December 31, creating an incentive for lenders to raise dollar funding before the window closes.
Indian banks raised $2.58 billion through dollar-denominated bonds and loans between June 8, when the RBI facility was introduced, and the end of July, according to central bank data.
Second Major Offshore Fundraise
The proposed loan follows ICICI Bank's $1 billion five-year bond sale last month. The transaction marked the lender's return to international debt markets after almost a decade.
The bank has also been exploring an additional $500 million offshore bond issue to take advantage of the RBI's foreign-exchange facility, Bloomberg had previously reported.
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The latest fundraising comes as ICICI Bank continues to expand its domestic lending operations. The lender reported better-than-expected profit for the quarter ended June, with its loan book growing by nearly 20% year-on-year.
The broader rush by Indian banks to tap offshore markets reflects efforts to divers