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Raghu Mohan
Mumbai, July 16: Blame it on whatever you like -- south-east Asian crisis, post-nuclear tests sanctions, rupee crisis or country-credit downgrades -- corporate India's favourite watering hole last calendar, the cross-border loan market, has dried up completely.
Foreign currency loan inflows during January-July period this year are down to a trickle at $1.74 billion, less than half of the $3.57 billion contracted during the comparable period last calendar.
Out of the $1.74 billion, State Bank of India bilaterals -- one-on-one loan transactions -- accounted for $637 million, with the Indian Oil Corporation (IOC) following at $500 million and the shipping sector with $212 million.Conventional syndicated loans accounted for a mere $393 million of overseas loan floatations.
One of the biggest accessers of foreign currency loans in the first half of last calendar -- financial instituitions -- have got nothing against their names. Last time around, financial institutions had raised $350 million andalong with IOC at $1.52 billion had raised a cummulative amount of $1.87 billion by this period.
In all, during the whole of the last calendar, corporates and state-run entities had raised $6.12 billion in foreign currency loans. And most of these inflows had materialised by September-October 1997 when the east-Asian flu made the region let out a big sneeze, blowing away with it the foreign currency loan plans of corporate India. Later developments have only accentuated the problem.
All this is a far cry from the scenario prevailing in the first half of the last calendar when two major greenfield projects sourced cross-border loans.
These included a $300-million one by Reliance Petroleum arranged by Bankam, ABN Amro Bank, Toronto Dominion and Bankers Trust; and a $283-million loan from the Birla-AT&T stable, lead managed by BankAm and Toronto Dominion.
Notable cross-border loan transactions since September 1997 are a $85-million Tisco facility arranged by BankAm in late December-January 1998, another Mumbai, July 16: Blame it on whatever you like -- south-east Asian crisis, post-nuclear tests sanctions, rupee crisis or country-credit downgrades -- corporate India's favourite watering hole last calendar, the cross-border loan market, has dried up completely.
Foreign currency loan inflows during January-July period this year are down to a trickle at $1.74 billion, less than half of the $3.57 billion contracted during the comparable period last calendar.
Out of the $1.74 billion, State Bank of India bilaterals -- one-on-one loan transactions -- accounted for $637 million, with the Indian Oil Corporation (IOC) following at $500 million and the shipping sector with $212 million.Conventional syndicated loans accounted for a mere $393 million of overseas loan floatations.
One of the biggest accessers of foreign currency loans in the first half of last calendar -- financial instituitions -- have got nothing against their names. Last time around, financial institutions had raised $350 million andalong with IOC at $1.52 billion had raised a cummulative amount of $1.87 billion by this period.
In all, during the whole of the last calendar, corporates and state-run entities had raised $6.12 billion in foreign currency loans. And most of these inflows had materialised by September-October 1997 when the east-Asian flu made the region let out a big sneeze, blowing away with it the foreign currency loan plans of corporate India. Later developments have only accentuated the problem.
All this is a far cry from the scenario prevailing in the first half of the last calendar when two major greenfield projects sourced cross-border loans.
These included a $300-million one by Reliance Petroleum arranged by Bankam, ABN Amro Bank, Toronto Dominion and Bankers Trust; and a $283-million loan from the Birla-AT&T stable, lead managed by BankAm and Toronto Dominion.
Notable cross-border loan transactions since September 1997 are a $85-million Tisco facility arranged by BankAm in late December-January 1998, another$75 million at around the same time for Tata-Bell Canada, two IOC loan rollovers -- a $500-million (inclusive of a $100-million greenshoe option) facility by ABN Amro Bank, Dresdner Bank and Krediet Bank in January and another in April by BankAm, a $190-million offering by Essar Shipping arranged by Novascotia, and by the now well-known Power Finance Corporation's $100-million arranged by ANZ Investment Bank.
The last mentioned is by far the only fresh borrowing this fiscal as IOC's $500-million loan rollover by BankAm in April was merely an execution of a contractual obligation entered into six months earlier.
One of the prime loans in the pipeline was a $200-million offering by cellular telephony operator BPL-US West, which has now been truncated substantially. A $50-million ECB from MSEB to be arranged by Societe Generale was dropped some time back. Indo-Gulf Fertilizers has followed suit with regard to a $50-milliom loan facility.
The spotlight is now on a $75-million refinancing for IRFC, a$250-million loan offering by the Maheshwar Hydel project in Maharashtra, as also benchmark setting ones by Reliance Power, Bina Power and L&T-CEA and Dabhol Power Company.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
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