Yes Bank raises $400 million in syndicated loans from lenders in Taiwan and Japan
Last month, India's fifth largest private sector bank was in the news for all the wrong reasons. Yes Bank saw its shares tumble 7.4%, its biggest single day fall in two years, post reports of a huge difference between its disclosed bad loans and RBI's assessment.
- Nov 21, 2017,
- Updated Nov 21, 2017 5:10 PM IST
Last month, India's fifth largest private sector bank was in the news for all the wrong reasons. Yes Bank saw its shares tumble 7.4%, its biggest single day fall in two years, post reports of a huge difference between its disclosed bad loans and RBI's assessment.
But now the private sector lender is on a high having raised $400 million in syndicated loans from lenders in Taiwan and Japan for on-lending to clients.
For the record, a syndicated loan involves a group of lenders (called the syndicate) who pool funds jointly for a single borrower. The advantages for the borrower include competitive fees and margins due to multi-bank involvement, fewer disclosure requirements, access to multiple resources and a chance to forge new banking relationships.
In Japan, Yes Bank raised JPY 16.5 billion or $150 million from eight lenders in a one-year loan in a maiden transaction. It has also exercised a greenshoe option to raise $250 million in a 5-year commercial loan from 17 Taiwanese banks, led by CTBC Bank, Bank of Taiwan, Mega International Commercial Bank and Land Bank of Taiwan.
A greenshoe is a clause in the underwriting agreement of an initial public offering that allows underwriters to buy up to an additional 15% of company shares at the offering price. The syndication, which was announced for an initial size of $200 million, saw a total subscription of $355 million. This is among the largest bank participation in a Taiwan loan transaction.
According to the bank, these loans will help fund its International Business Unit (IBU) at the GIFT City in Gandhinagar, Ahmendabad.
This the second time that the bank has raised money from Taiwan-last year it had raised a 5-year, $130 million syndicated loan from 10 banks. "Yes Bank's continued success in loan syndications with global banks and financial institutions reinforces the bank's established competence in raising diversified liabilities from multilaterals and the bilateral and commercial loan markets, based on our robust business and financial model," said MD and CEO Rana Kapoor in a statement.
Last month, India's fifth largest private sector bank was in the news for all the wrong reasons. Yes Bank saw its shares tumble 7.4%, its biggest single day fall in two years, post reports of a huge difference between its disclosed bad loans and RBI's assessment.
But now the private sector lender is on a high having raised $400 million in syndicated loans from lenders in Taiwan and Japan for on-lending to clients.
For the record, a syndicated loan involves a group of lenders (called the syndicate) who pool funds jointly for a single borrower. The advantages for the borrower include competitive fees and margins due to multi-bank involvement, fewer disclosure requirements, access to multiple resources and a chance to forge new banking relationships.
In Japan, Yes Bank raised JPY 16.5 billion or $150 million from eight lenders in a one-year loan in a maiden transaction. It has also exercised a greenshoe option to raise $250 million in a 5-year commercial loan from 17 Taiwanese banks, led by CTBC Bank, Bank of Taiwan, Mega International Commercial Bank and Land Bank of Taiwan.
A greenshoe is a clause in the underwriting agreement of an initial public offering that allows underwriters to buy up to an additional 15% of company shares at the offering price. The syndication, which was announced for an initial size of $200 million, saw a total subscription of $355 million. This is among the largest bank participation in a Taiwan loan transaction.
According to the bank, these loans will help fund its International Business Unit (IBU) at the GIFT City in Gandhinagar, Ahmendabad.
This the second time that the bank has raised money from Taiwan-last year it had raised a 5-year, $130 million syndicated loan from 10 banks. "Yes Bank's continued success in loan syndications with global banks and financial institutions reinforces the bank's established competence in raising diversified liabilities from multilaterals and the bilateral and commercial loan markets, based on our robust business and financial model," said MD and CEO Rana Kapoor in a statement.