Reliance Industries Ltd and its telecom arm Jio Infocomm have raised a total of $5 billion in back-to-back foreign currency loans, the largest syndicated loan in India's corporate history, sources said.

Reliance last week raised $3 billion from 55 banks and Reliance Jio Infocomm secured additional credit of $2 billion from 18 banks, sources aware of the development said.

The $3 billion financing closed on March 31 and the add-on facility of $2 billion was secured on Tuesday, they said.

Reliance will mainly deploy the funds raised towards its capital expenditure, while Jio would put the money to finance its nationwide 5G network rollout.

The $2 billion add-on will be split equally between Reliance and Jio and is likely to be wrapped up by the end of April, they said.

The primary syndication of $3 billion involved around 55 lenders, including nearly two dozen Taiwanese banks as well as global giants such as Bank of America, HSBC, MUFG, Citi, SMBC, Mizuho, and Credit Agricole.

The new loan of $2 billion has the same terms as the borrowing signed on March 31 with 55 lenders, including 40 that joined in two phases of syndication.

The sources said the blowout response was not surprising considering the momentum the $3 billion borrowings had already generated in the senior phase by mid-January when it was launched into general syndication.

The oil-to-telecom conglomerate is one of the most sought-after credits from India and enjoys deep banking relationships.

"This was visible from the remarkable response to the $3 billion loan, but also from the reception the $2 billion add-on has already received," a senior banker said.

Eighteen banks, including the 15 senior MLABs of the $3 billion loan and others joining in the senior phase, are expected to form the syndicate for the $2 billion add-on, which is split equally for Reliance and Jio, and is likely to be wrapped up by the end of the month.

MLAB refers to Mandated Lead Arranger and Book Runner.

The size of the add-on is two-thirds that of the original $3 billion loan -- quite large and unusual in Asian loan markets for what is effectively an unplanned greenshoe option.

The decision to raise another $2 billion stems from the overwhelming response from the market as lenders remain hungry for the blue-chip group that has not been active in the syndicated loan market in recent years.

Nearly a third -- $927 million -- of the allocations went to 19 Taiwanese banks that dominated the final list of lenders in the syndicate while another eight from Japan took $ 276.36 million combined.

The $3 billion borrowing is also split equally for Reliance and Jio, with the latter's portion being its first non-recourse loan.

Last year, Jio obtained a $750 million five-year new-money club loan for capital expenditure.

Reliance Industries Ltd's (RIL) last syndicated offshore borrowing was a $1.45 billion dual-currency financing completed in 2020, comprising a $1.1 billion 3.5-year piece and 38.45 billion yen five-year portion.

The yen loan offered an all-in pricing of around 78 bp – 81 bp, while the US dollar tranche paid an all-in of 101.5 basis point (bp) based on a margin of 79 bp over Libor and an average life of 3.25 years.

The USD 3 billion borrowing signed last week is Reliance group's largest syndicated loan and is split into $1.15 billion and 48.78 billion yen (USD 380 million) tranches with an average life of 5.25 years for RIL, and five-year portions of $1.2 billion and 41.81 billion yen for Jio.

ANZ, Bank of America, BNP Paribas, Credit Agricole CIB, Citigroup, DBS Bank, First Abu Dhabi Bank, HSBC, Scotiabank, Standard Chartered Bank, State Bank of India and United Overseas Bank were the senior MLABs on the US dollar tranches for both borrowers.

Mizuho Bank, MUFG and Sumitomo Mitsui Banking Corp underwrote the yen tranche for Jio's loan, with Credit Agricole also lending alongside the three Japanese mega banks on the yen portion for RIL's borrowing.

DBS is global coordinator for the $2 billion add-on and was also in that role for the $3 billion borrowing, which paid top-level all-in pricing of 146 bp and 156 bp for the US dollar portions for RIL and Jio, respectively.

The yen tranches paid top-level all-ins of 66.50 bp and 76.50 bp for the two borrowers, respectively.

The US dollar portions for RIL and Jio pay interest margins of 121 bp and 128 bp over term SOFR (Secured Overnight Finance Rate), respectively, while the yen pieces offer 58 bp and 65 bp over the Tokyo Overnight Average Rate (Tonar).

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