India loan house

IFR Asia Awards 2014
3 min read
Prakash Chakravarti

RBS had a strong profile in India in its former incarnation as ABN Amro, having arranged countless corporate and acquisition loans for clients in the country before the global financial crisis.

Now revamped and under new management, RBS once again proved its mettle in 2014 in the face of intense competition from foreign and domestic lenders.

After a steep decline in the rupee in August 2013, India’s political and economic situation created a difficult climate until the national elections in mid-May, when a landslide win for Narendra Modi’s pro-business Bharatiya Janata Party reassured the financial sector and raised hopes for the economy.

The first six months of IFR’s review period was a tense time for loan arrangers, and it was the performance of RBS during that time that set it apart from the crowd.

Taiwanese banks, traditionally Asia’s largest international lenders, were deterred from providing retail liquidity to Indian companies on macroeconomic concerns and rising funding costs with the three-month TAIFX, Taiwan’s interbank US dollar lending rate, touching a two-year high of 160bp in mid-March and hovering above 150bp until mid-May.

Against this difficult backdrop, RBS stepped up for its clients, and won sole mandates from sought-after borrowers in an extremely competitive market. The bank won the sole mandate from Bharat Oman Refineries for a US$70m 6.6-year loan, a bullet facility with the longest tenor for an Indian borrower since the global financial crisis. RBS syndicated the loan about the time state-owned Bharat Petroleum Corp, Bharat Oman’s 50% shareholder, launched a US$500m six-year loan with seven mandated lead arrangers and bookrunners.

RBS added another feather to its cap in late January with a sole mandate on a US$400m five-year amortising loan for Bharti Airtel, which it prefunded and syndicated to seven other banks – all of which were first-time lenders to the borrower. At the time, it was the largest sole underwriting on a loan for an Indian borrower since the financial crisis.

RBS also notched up repeat mandates on top-heavy loans for Hindustan Petroleum Corp, Indian Oil Corp, ONGC Videsh, Tata Power and Vedanta Resources. The facilities for IOC and ONGC Videsh were acquisition loans and, in addition to Oil India, these state-owned Indian oil-and-gas companies provided much of the deal flow in the review period.

Other private sector mandates included those from Bharat Forge, Reliance Industries and Tata Communications, which helped the bank achieve a No 4 ranking in the bookrunner league tables for Indian loans in the review period with US$1.57bn of volume from a dozen deals.

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