IDBI seeks $75m to shed foreign currency, domestic liabilities

By Our Banking Bureau | 05 Mar 2003

Bangalore: IDBI has hit the global financial markets to raise $75 million in a bid to shed some of its high-cost foreign currency and domestic liabilities.

The five-year loan was being syndicated by Barclays Bank and Hong Kong and Shanghai Banking Corporation. This is the first loan syndication being undertaking by IDBI in the current year.

While the terms of the loan have been specified as general corporate purposes, sources say the prepayment of both foreign currency and domestic liabilities are the reasons for the loan rather than meeting the funding requirements of a fresh asset build-up.

The high-cost liabilities include borrowings raised in the domestic markets, raised at rates upwards of 12 per cent during 1997 and 2000 when rates were high. Among the issues that are expected to be shed include the Flexi-3 and Flexi-4 series of bonds, which had a combination of both regular, return and deep-discount bonds.