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REC raises US$75 million for refinancing power projects

By IndianMandarins- 21 Oct 2021
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Gurugram (20.10.2021): REC Limited has successfully raised a US$75 million loan on October 7, 2021, to refinance various power projects. as permitted under the ECB guidelines of the Reserve Bank of India.
The loan is 5-year Secured Overnight Financing Rate (“SOFR”) linked Syndicated Term Loan.
For this, Sumitomo Mitsui Banking Corporation (SMBC), Singapore Branch, was appointed as the sole Mandated Lead Arranger and Bookrunner.
Along with the loan, REC has also entered into an interest rate swap referencing SOFR to hedge the interest rate risk on this facility, which is the first such deal by any company in India.
Commenting on the successful closure of the USD Term Loan, Sanjay Malhotra, Chairman and Managing Director of REC, said, “With the imminent cessation of LIBOR and following the notification from the Reserve Bank of India on the roadmap for LIBOR Transition, we are very happy to raise this SOFR linked Term Loan Facility, which is also the first one by any NBFC in India. The experience gained from the process will enable REC in USD LIBOR transition to SOFR for our existing term loans in a better manner.”
SMBC’s Managing Executive Officer and Deputy Head, Asia Pacific Division, Rajeev Kannan commented, “We are pleased to partner with REC for our first SOFR linked ECB facility in India and for providing the solutions for interest rate risk management. As a leading player in the syndicated loans and ECB market, SMBC is committed to working with Indian PSUs and corporates using the new interest rate benchmarks.”

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