State Bank of India (SBI), the country’s largest commercial bank, has raised $500 million (around ₹3,800 crore) through a three-year syndicated loan via its IFSC Gift City branch. This is the first offshore secured overnight financing rate (SOFR) linked loan raised by the public sector lender through its Gift City branch.
The offshore loan facility is for $400 million, with a green shoe-option of $100 million, SBI said in a release on Monday. However, the lender did not disclose the details of pricing.
The state-owned lender said that this is a major step towards developing IFSC Gift City as an international financial hub. It further stated that SBI's Gift City branch had become the largest branch in IFSC.
"The successful launch of syndicated loan at such a fine pricing demonstrates the kind of reputation SBI has created for itself in offshore financial markets, allowing it to efficiently raise funds even during ongoing turbulence in the markets caused by geopolitical tensions and rate hike expectations by US Federal Reserve and other central banks across the globe," its Managing Director Ashwini Tewari said.
MUFG, Bank of America and JP Morgan were the joint lenders for this offering, while Fist Abu Dhabi Bank acted as the facility agent.
What is an IFSC?
International Financial Services Centre (IFSC) is an initiative by the government of India (GoI) that caters to the customers outside the jurisdiction of the domestic economy, such as non-resident Indians (NRIs) and foreign investors. It has been set up to undertake financial services transactions that are currently carried on outside India by overseas financial institutions and overseas branches/ subsidiaries of Indian financial institutions.
What is the objective of IFSC at GIFT City?
Government of India operationalised International Financial Services Centre (IFSC) in the Gujarat International Finance Tec-City (GIFT) located at Gandhinagar, Gujarat, in April 2015. GIFT IFSC aspires to become India’s gateway for inbound and outbound requirements of international financial services. It aims to facilitate the development of a strong base of international financial services in the country.
The IFSC in GIFT City (GIFT IFSC) seeks to bring back those financial services transactions that are currently carried on outside India by overseas financial institutions and overseas branches/ subsidiaries of Indian financial institutions to the Indian shores.
