COUNTRY REPORT INDIAthe group in Dubai in 1987. The borrower
is a holding company for the group’s
operations in the Middle East. It was
incorporated nine years ago and renamed
from Dr Moopens Holdings in 2014.
Aster DM Healthcare is an Indian
company controlling all the group’s
operations.
For full allocations, see http://www.ifrasia.com.
› BHARAT SENDS OUT RFP FOR REFI
Indian state-owned oil-and-gas company
BHARAT PETROLEUM has sent out a request
for proposals for a US$100m three-year
refinancing loan.
The deadline for banks to respond is
today.
Pricing on the bullet loan is expected
around mid-70s to early 80s.
Proceeds will refinance a US$170m loan
closed a few years ago. BPCL is repaying
US$70m through internal resources and
refinancing the remainder with the new
loan.
The borrower was last in the market
for a US$150m five-year refinancing in
April. DBS Bank and Standard Chartered
closed the loan as a two-bank club. Funds
refinanced part of a US$750m one-year
bridge loan signed last year to fund BPCL’s
purchase of a stake in Russian oilfields.
Last month, wholly owned BPCL unit
Bharat PetroResources launched a US$400m
dual-tranche term loan into general
syndication. DBS Bank and State Bank
of India, acting through its Hong Kong
branch, are the mandated lead arrangers
and bookrunners on the financing, which
has the backing of a standby letter of credit
from a permitted bank. The borrowing
comprises a US$100m five-year tranche
A and a US$300m seven-year tranche B,
paying interest margins of 72bp and 102bp
over Libor, respectively. The remaining
average lives are 4.58 years and 6.58 years,
respectively. Tranche A offers lenders a top-
level all-in pricing of 108bp, while tranche
B offers a top-level all-in of 121bp.
Another peer, Indian Oil Corp has
launched a US$300m five-year term loan
into general syndication, cutting pricing
to an all-time low for a facility with that
tenor since the 2008 global financial crisis,
sources have said. Bank of Nova Scotia is
MLAB on the facility, paying an interest
margin of 70bp over Libor for a remaining
life of 4.75 years.› YES BANK SEEN BORROWING MOREYES BANK is likely to increase the size of its
US$200m five-year term loan after receiving
commitments of US$295m so far in general
syndication.
The Indian lender had first extended theresponse deadline for the loan to the first
week of October from September 22. Now,
it is expected to close in late October.
Bank of Taiwan, CTBC Bank, Land Bank of
Taiwan and Mega International Commercial
Bank are the mandated lead arrangers and
bookrunners. CTBC is the facility agent.
The loan pays an interest margin of
120bp over Libor. Lenders were offered
a top-level all-in pricing of 138bp, via a
participation fee of 90bp.
Funds are for general corporate purposes.
The bank is also raising a separate ¥5bn
(US$45m) one-year loan.
Mitsubishi UFJ Financial Group is the
sole MLAB on the Samurai loan, with an
unspecified greenshoe option. It is targeted
at Japanese lenders. The margin is 50bp
over yen Libor. Banks are being offered a
top-level all-in pricing of 55bp.
Yes Bank, a Baa3 credit to Moody’s, is
India’s fifth-largest private lender with an
asset base of US$34bn as of June 30.EQUITY CAPITAL MARKETS
› RELIANCE GENERAL FILES IPO DRAFTRELIANCE GENERAL INSURANCE has filed to the
Securities and Exchange Board of India
a draft prospectus for its IPO of Rs12bn–
Rs15bn (US$183m–$229m).Indian banks prepare for AT1 issues
Bonds Bank of Baroda and Corporation Bank target proceeds of Rs5bn each, plus greenshoesState-owned BANK OF BARODA and CORPORATION
BANK plan to sell Basel III-compliant
Additional Tier 1 bonds with a call option
after five years.
The pair intend to raise Rs5bn (US$77m)
each from the bonds, as well as greenshoe
amounts, according to market sources.
Bank of Baroda has received board
approval to sell AT1 notes of up to Rs16.5bn
in one or more tranches, according to a BSE
release.
Crisil and India Ratings have assigned AA+
to Bank of Baroda’s perpetual notes.
Brickwork has assigned a A+ rating, with
a negative outlook, to Corporation Bank’s
AT1s.
Public-sector banks have been finding
it difficult to market AT1 bonds in the past
few weeks. ALLAHABAD BANK was able to raise
only Rs1bn from non-call five AT1s at 11.85%
and BANK OF INDIA scrapped a planned Rs5bn
sale of non-call five perpetual bonds after
receiving a lowest bid of 11.5%, althoughsecondary market levels were around 10.75%,
said DCM bankers.
Investors are factoring in higher risk for
AT1 bonds of state-owned banks, despite
government support and looser coupon
payment rules.
In August, IDBI BANK received a equity
capital injection of Rs18.6bn from the
government ahead of an AT1 coupon
payment date.
In February, the Reserve Bank of India
changed its rules to allow banks to pay AT1
coupons from their statutory reserves, shortly
before Indian Overseas Bank was due to
make a payment.
The recent capital infusion in a state-
owned bank reiterates the government’s
intent to ensure that PSBs do not default
on debt instruments. It indicates limited
likelihood of a further easing or regulatory
forbearance for ATI bonds, according to Icra
note dated October 3.
“The ATI regulations are still open tointerpretations and, notwithstanding the past
relaxations, the coupon servicing by weaker
PSBs continues to be characterised by high
risks,” said Karthik Srinivasan, group head of
financial sector ratings at Icra, in a note.
“The inclusion of ATI bonds in the
overall capital of a bank creates an illusion
of comfortable capitalisation, which is
misleading if these instruments are being
bailed out.”
Six state-owned banks are short of the
statutory Common Equity Tier 1 ratio, while
five more are shy of the regulatory Tier 1
requirement for FY18, according to Icra.
“If the ATI bonds are not allowed to absorb
losses, it would be prudent to not accord
T1 status to them,” said Srinivasan. “Amid
intermittent breaches of regulatory capital
ratios, last minute capital support and
changes in regulations, investors would be
prudent to factor in the distinct possibility of
a coupon skip.”
KRISHNA MERCHANT