SBI adds to record samurai loan boom with $197 million debt facility

By Chien Mi Wong and Saikat Das

 

State Bank of India, the country’s largest lender, is seeking a ¥30 billion ($197 million) facility, according to people familiar with the matter, adding to a record volume of yen loans raised by borrowers in Asia excluding Japan this year.

 

Mitsubishi UFJ Financial Group Inc. is the lead bank of the deal, which will be raised in the Gujarat International Finance Tec-City, India’s newest financial hub, said the people, who asked not to be identified discussing a private matter. The facility carries a five-year tenor, the people added. 

 

It will pay an interest margin of 60 basis points over the Tokyo overnight average rate, or TONA, a global benchmark gage for yen-denominated deals, according to one of the people. SBI and MUFG didn’t immediately reply to requests seeking comments.

 

The loan would add to a tide of Samurai loans, where foreign companies raise yen debt, in Asia recently as they seek to lower funding costs and diversify away from the relatively-expensive dollar space. Borrowers from Asia excluding Japan have signed a record ¥1 trillion in such facilities year-to-date, according to Bloomberg-compiled data.

 

The latest loan would be SBI’s first facility denominated in the Japanese currency since September 2023, when it had signed a ¥40 billion five-year loan, according to Bloomberg-compiled data. The India bank is also seeking a syndicated dollar-denominated deal of as much as $1.25 billion.

 

SBI plans to use proceeds of the yen loan for foreign currency lending, one of the persons said.