YES Bank has raised $257 million through a two-tranche, dual currency (US dollar and euro) multi-tenor syndicated loan facility. The bank has raised $75 million and €34 million for one year and the balance $105 million and €24 million for two years.
The private sector lender becomes the first to avail the swap loan facility announced by the RBI last week.
The RBI, on September 10, had announced that banks could raise funds up to 100 per cent of their unimpaired Tier I capital and swap these borrowings with the central bank at a concessional rate for one to three years.
Rajat Monga, YES Bank’s CFO and Group President, Financial Markets, said: “Availing the swap facility for the banks’ foreign currency borrowings, at 100 basis points below the market rate, further makes the landed rupee cost (or the effective interest rate) of these funds cheaper at about 8.5 per cent to 8.75 per cent, than the rupee equivalent.”
“The cost of funds for YES Bank will be three to five basis points lower due to this facility, thereby helping the net interest margins to some extent in the ongoing high interest rate environment,” Monga added.
YES Bank said in a statement: “The loan has been distributed with commitments from 11 banks representing eight countries. The facility shall be utilised for general corporate purposes and trade finance.” The transaction was done through banks such as ANZ, Citigroup, HSBC, StanChart, and SBI, among others.