Reliance Jio Arranges of a $1.5 Credit Facility to Refinance Existing Loans
sacchitjogi07 | 20 Nov 2014

Reliance Jio Infocomm has acquired credit facilities valued at $1.5 billion with lenders such as Barclays and Bank of America.

Refinancing Debt tied in 2010

It is said that the company will make use of these latest credit arrangements to refinance the debt that it tied in 2010. The guarantor of the new loan facilities is Reliance Jio's parent company, Reliance Industries Limited (RIL).

Reliance Jio, through an official statement said that," The new credit facility comprises $1 billion facility I, which has a total maturity of 5.5 years and the $0.5 billion facility II, which has a total maturity of 7 years." The statement further added that this represents the longest average maturity for an unsecured syndicate loan of a similar size in Asia in FY14.

Global Participation of Banks

The facility has been fully underwritten by an initial group of 15 core relationship banks that come together to form the Mandate Lead Arrangers and Bookrunners (MLABs). This includes the Australia and New Zealand Banking Group Limited, Barclays Bank PLC, Bank of America, The Bank of Nova Scotia, BNP Paribas – Singapore Branch, The Bank of Tokyo-Mitsubishi UFJ as well as Citigroup Global Markets Singapore Pte. Ltd.

The statement said, "The deal witnessed significant over subscription before it was launched into syndication and two banks joined in as MLAs. The overall bank group saw participation from banks all over the world, including North America, Europe, Australia, Asia and the Middle East. This term loan syndication saw a total of 26 banks participate in the facility." As per the statement, the strong participants in providing facility included banks from the Middle East, Taiwan and Japan. The 2 MLAs that came before the syndication included the United Overseas Bank Limited and the National Bank of Abu Dhabi P.J.S.C.

The statement also highlighted that the facility witnessed a significant response in syndication and was able to raise over $400 million. In compliance with the guidelines set by the Reserve Bank of India (RBI), the facility saw participation only from International Banks.

Those which joined in the syndication include the Societe Generale SA, Land Bank of Taiwan – Singapore Branch, Abu Dhabi Commercial Bank, Sumitomo Mitsui Trust Bank Limited – Singapore Branch, Mega International Commercial Bank Co. Ltd, Offshore Banking Branch.

Reliance Jio's Rollout Plans

Reliance Jio is the only company that holds a pan-India broadband wireless access spectrum for use in providing 4G services. The company has already announced that the commercial 4G telecom services will be launched in early 2015. Currently, the company has commenced testing its services and is on a hiring spree of about 3000 employees on a regional level.

Entailing an investment of INR70,000 crores, the company plans on initially covering about 5,000 towns and cities which account for over 90% of urban India. In addition to this, the phase I will also include launching services in 215,000 villages across the nation. It is Reliance Jio's target to expand to over 600,000 villages in India.