Yes Bank raises Rs 2,600 cr from banks in Japan, Taiwan

India’s fifth largest private sector bank Yes Bank said it is raising $400 Mn — about Rs 2,600 cr — through two five-year syndicated loans from banks in Taiwan and Japan.

It will raise $250 Mn from Taiwanese banks and 16.5 Bn Yen — about $150 Mn — from Japan.

“YES BANK has successfully tied up 5-year commercial loan in a Syndication led by CTBC Bank, Bank of Taiwan, Mega International Commercial Bank and Land Bank of Taiwan,” it said.

The Syndication in Taiwan was announced for an initial size of USD 200 Mn with a green-shoe option. However, it saw a total subscription of USD 355 Mn from 13 banks apart from the 4 mandated lead arrangers, making it among the largest bank participation in a Taiwan loan transaction.

The issue was closed with the loan being upsized to USD 250 Mn.

This is YES BANK’s second loan syndication in Taiwan, after a successful transaction in 2016 for a 5 year, USD 130 Mn. loan which saw participation from 10 banks including the mandated lead arrangers – CTBC Bank and Taiwan Cooperative Bank.

It also raised its maiden Samurai loan for one year, the Syndication for which was solely led by Bank of Tokyo Mitsubishi UFJ, Ltd.

The issue was also oversubscribed and saw total participation of 16.5 Bn Yen or about USD 150 Mn. across 8 banks.

The transactions will help fund its International Business Unit (IBU) at the GIFT City in Gandhinagar, the bank said.

“YES BANK’s IBU continues to be the largest at GIFT City with an asset book of over USD 1.4 Bn as on 30th September, 2017,” it said.

Rana Kapoor, MD & CEO, YES BANK said, “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. Our maiden Samurai transaction in Japan and strategic syndications in Taiwan demonstrate the Bank’s ability to tap varied resource pools at competitive prices.”

Capital tends to be cheaper in places like the US and Japan, enticing companies in India to raise money overseas. However, they also carry a high risk of adverse currency impact, as any deterioration of the Indian currency against such overseas currencies adds to the cost of the loan.