Shriram Finance raises $ 150 million loan from MUFG Bank

31 Mar 2023 , 10:38 AM

Shriram Finance, formerly recognized as Shriram Transport Finance (STFC), has  raised $150 million via a private placement of senior secured floating-rate notes from MUFG Bank of Japan. 

These notes will be due in 2026 and are being offered at a premium of 225 basis points to the secured overnight financing rate (SOFR). As a result, the financier will incur a cost of 9%.

A basis point is equivalent to 0.01%.

The notes issued by Shriram Finance are supported by a fixed charge on designated receivables, which is in keeping with the company’s existing secured domestic bonds and senior secured debt issued overseas in both rupees and US dollars.

As per the external commercial borrowings (ECB) framework of the Reserve Bank of India (RBI), the notes are being issued on a floating interest-rate basis of 2.25% above the compounded daily SOFR. Furthermore, the notes will be listed on the India International Exchange, and they have received a ‘BB’ rating from Fitch Ratings.

Shriram Finance mainly relies on term loans, non-convertible debentures, and public deposits for its borrowing requirements. External commercial borrowing (ECB) loans make up less than 5% of the company’s overall borrowing portfolio.

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