RIL's $2 billion 13-year syndicated loan over subscribed by about 50 per cent

Reliance Industries Limited (RIL) has received an over 50-per cent oversubscription for its $2 billion syndicated loan arranged by a group of German banks under a Euler Hermes Deutschland AG cover, despite a challenging financial market. 

RIL on Monday signed a loan syndication agreement with nine banks underwritten by Euler Hermes, for an amount equivalent to $2 billion. The loan is reported to have received subscription of around $3 billion.

The loan will be primarily used to finance goods and services procured from German suppliers as part of RIL's petrochemicals expansion projects at Jamnagar, Hazira, Silvassa and Dahej in India, RIL said in a release today.

Euler Hermes has accorded 'Better than Sovereign' rating to RIL and the loan syndication facility is among the largest underwriting by Euler Hermes in recent years, RIL said in its release.

The loan deal, which has a maturity of 13 years, will help RIL diversify its funding sources and extend the maturity profile of its long-term debt in a cost-effective manner, the company said in its release.

''We are delighted with the support provided by Euler Hermes for this landmark financing. This deal received strong support from international banks, particularly from German lending institutions. The better than sovereign assessment by Euler Hermes is a strong testimony of RIL's credit standing in the international markets," V Srikanth, joint chief financial officer of RIL, said.

KfW IPEX-Bank GmbH arranged the Euler Hermes cover and the nine participating banks in the funding of the facility include: KfW IPEX-Bank GmbH, Citibank NA, Commerzbank AG, Nord LB, Banco Santander, SA, Landesbank, Baden-Württemberg, DZ BANK AG, BHF-BANK AG, ING Bank and a Branch of ING-DiBa AG. 

Reliance Industries Limited (RIL) is India's largest private sector company, with a turnover of Rs339,792 crore ($66.8 billion), cash profit of Rs31,994 crore ($6.3 billion) and net profit of Rs20,040 crore ($3.9 billion) as of 31 March 2012.