HDFC Bank, India's largest lender by market value, has recently doubled its overseas borrowing through a term loan syndication from 23 global banks, including Japan's MUFG, in a greenshoe option to the primary facility. Initially borrowing $500 million from MUFG in December, HDFC Bank exercised the green shoe option to raise another $500 million, bringing the total proceeds to $1 billion. This marks the largest three-year overseas loan organized by an Indian bank for general corporate purposes.
According to sources familiar with the deal, the syndication was completed recently, with HDFC Bank opting to exercise the full green shoe option due to strong demand from foreign banks. Banks from Asia, the Middle East, and Europe participated in the syndication, demonstrating the broad interest in HDFC Bank's offering.
The funds raised will be used by HDFC Bank to bolster its liabilities following the merger with its mortgage lending parent HDFC last year. The loan, priced at 110 basis points above the three-month Secured Overnight Financing Rate (SOFR), translates to an interest rate of about 6.45% for the three-year term.
MUFG initially served as the sole bank mandated with the loan, financing it through its branch in India's Gift City. However, at the syndication stage, MUFG retained only $150 million, with the remaining amount sold to other lenders from various countries, including Taiwan, Japan, and Saudi Arabia. This syndication process ultimately led HDFC Bank to secure the total $1 billion loan.
