Analysts opine that many Indian companies are interested to refinance their rupee debt by raising funds in the global market at a lower interest rates as compared to the domestic rates.
Given the flexible terms and low rates, investors and fund managers are reportedly exploring the cheaper US loan market. These loans have become more common as they have longer maturities and repayment schedules, analysts opine.
For example, the London Stock Exchange-listed Vedanta Resources plans to refinance its $3 billion Cairn India acquisition by raising funds from the US loan market.
The company has reportedly mandated Standard Chartered, Bank of America Merrill Lynch, and the Royal Bank of Scotland Group to arrange the refinancing.
While the company is to raise $1 billion from banks in a five-year term loan, it will source the rest of the syndicated portion from the United StatesÂ’ B-term loan market.
Several months ago, Vedanta said it would combine Sterlite Industries and Sesa Goa to reduce liabilities. The company has $17 billion as debt, considered the highest by a metal company operating in India.
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