Reliance Jio to use syndicated loans to refinance loans up to 2010

Reliance Jio Infocomm, the telecommunications arm of Mukesh Ambani's Reliance Industries Ltd, which is raising $1.5 billion from 26 banks, will refinance loans it took up in 2010, the company said in a statement late on Monday.

The company had yesterday disclosed having signed agreement for a syndicated term loan facility of $1.5 billion (See: Reliance Jio Infocomm raises $1.5 billion in syndicated term loan). The new loan facility has been tied up at significantly better terms than the facilities being refinanced which were signed in 2010, RIL said.

The refinancing comprises $1 billion with a total maturity of 5.5 years, and $500 million, with a total maturity of 7 years, the company said.

In September, Reliance Jio had said it had raised a $750 million loan from Korea Exim Bank to finance the purchase of telecoms infrastructure from Samsung Electronics.

Reliance has said it will invest over $11 billion for its 4G telecom services as the company beefs up infrastructure ahead of a nationwide rollout next year.

This represents the longest average maturity for an unsecured syndicated loan of similar size in Asia this year, it added.

The facility was fully underwritten by an initial group of 15 core relationship banks that comprise mandated lead arrangers and book runners.

''The deal witnessed significant over-subscription before it was launched into syndication and two banks joined in as MLAs.

''The overall bank group saw participation from banks all over the world, including North America, Europe, Australia, Asia and the Middle East. This term loan syndication saw a total of 26 banks participate in the facility,'' the statement said.

Middle Eastern, regional Taiwanese and Japanese banks strongly participated in providing facility, the statement said.

''The facility saw tremendous response in syndication and raised over USD 400 million. In compliance with RBI guidelines, this facility saw participation from only International banks,'' the statement added.

The 15 MLABs for the facility include Australia and New Zealand Banking Group Ltd, Bank of America NA, Barclays Bank PLC, BNP Paribas, Singapore Branch, The Bank of Nova Scotia Asia Ltd, The Bank of Tokyo-Mitsubishi UFJ, Ltd and Citigroup Global Markets Singapore Pte Ltd.

The 2 MLAs which came in before syndication are National Bank of Abu Dhabi PJSC and United Overseas Bank Ltd.

Reliance Industries has already announced that it will launch commercial 4G telecom service of RJio in 2015 entailing investment of Rs70,000 crore.

RJio will initially cover about 5,000 towns and cities, accounting for over 90 per cent of urban India, as well as over 215,000 villages. The target is to expand this to over 600,000 villages.

RJio in the only company which hold pan-India broadband wireless access spectrum that can be used for 4G services.