ICICI Bank, the country's second largest bank, is planning a $1 billion overseas syndicated loan. This is the third time in four months that the bank will tap the overseas market for funds, reports Business Standard.
"Fourteen banks have been mandated for arranging the loan. The pricing is likely to take place by early next week," said investment banking sources.
"The amount will be raised in tranches," said sources. In the first tranche, the bank plans to raise $400 million, followed by $350 million in the next tranche.
The bank will use the funds to maintain its growth momentum in lending. The bank's net customer assets grew 47 per cent to Rs 1,63,785 crore at the end of September 2006 from Rs 1,11,514 crore a year earlier.
The bank has also been significantly scaling up its international assets. The loan portfolio of the bank's international branches (including foreign currency financing to Indian companies) increased 56.25 per cent to about Rs 15,000 crore in the second quarter of the year from Rs 9,600 crore in the year-ago period.
The loan portfolio of the bank's international banking subsidiaries (including foreign currency financing to Indian companies) more than doubled to around Rs 9,400 crore from Rs 4,100 crore over the same period. The bank operates in 14 countries through branches, representative offices and subsidiaries.
The bank has already tapped the international debt market twice in the last four months. In October, the bank raised $400 million through a five-year bond at 120.6 basis points over US treasury. One basis point is one hundredth of a percentage point. In August, the bank raised $340 million through perpetual hybrid tier I securities at a coupon of 7.25 per cent.
The pricing was at a spread of 194 basis points over London interbank offered rate (Libor), translating into a spread of 247 basis points over 10-year US treasury bond.
Earlier in the year, ICICI Bank had raised $300 million through a commercial paper (CP) in the US to support its international operations, which were seeing a rise in overall assets.
In addition to the CP issue, the bank raised $300 million through a yen-denominated 1-year loan to fund its domestic operations. The bank has also raised Rs 2,700 crore from the domestic market through tier I and tier II bonds since January this year.
Its capital adequacy ratio (CAR) was 14.34 per cent at the end of the September 2006 compared with 11.52 per cent in the earlier year.
