Reliance Industries Secures $3 Billion Loan From 11 Banks In Largest Borrowing Deal In Two Years

Reliance Industries Limited (RIL), India's largest corporation by revenue, has secured $3 billion from a group of 11 banks, marking its largest borrowing deal in almost two years, according to a report from The Economic Times.

The five-year loan, finalised last month, is priced 120 basis points above the three-month Secured Overnight Financing Rate (SOFR), with $450 million denominated in Japanese yen.

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RIL is preparing for significant loan repayments due in 2025. A source mentioned that the company has already utilised $700 million from the loan and plans to access more funds in the current quarter as needed.

Loan Terms and Pricing

In mid-December, the three-month SOFR rate was approximately 4.80 per cent. With the added 120 basis points, the dollar-denominated loan is priced at about 6 per cent. The yen-denominated part of the loan is priced at 75 basis points above the three-month Tokyo Interbank Offer Rate (TIBOR), the Japanese benchmark rate.

The loan agreement, which covers both US dollars and Japanese yen, was executed last month.

The $3 billion loan is primarily intended to refinance existing loans maturing in 2025. More banks are expected to join the syndicate later this quarter, which will help lenders manage risks and increase their capacity to lend to RIL, one of India's most creditworthy companies.

Bloomberg data indicates that RIL has approximately $2.9 billion, including interest payments, due in 2025. The company sought this loan to improve its financial flexibility.

Key Banking Partners in the Deal

According to a document, Bank of America holds the largest share of the loan at $343 million. Other key participants include DBS Bank and HSBC, each contributing $300 million, Japan's MUFG at $280 million, and India's State Bank of India at $275 million. Japanese lenders Standard Chartered, Mizuho Bank, and SMBC each have a $250 million exposure. First Abu Dhabi Bank, Citibank, and Credit Agricole CIB each contributed $241 million.

This recent deal mirrors a dual-currency dollar-yen loan RIL raised in late 2022, which attracted significant interest from global banks. That loan eventually grew to $5 billion, exceeding the initial $3 billion target after receiving approval from the Reserve Bank of India.

Reliance Industries remains India's highest-rated corporate borrower, holding a BBB+ credit rating with a stable outlook from S&P, which is higher than India's BBB- sovereign rating.