INSUBCONTINENT EXCLUSIVE:
While most of India's shadow lenders remain caught in a prolonged cash crunch at home, some of the highest-quality financiers are finding
that yield-hungry investors in the global loan market are eager to extend credit.That's helped reduce average margins on overseas loan
deals for non-state Indian shadow lenders to a record low, according to data compiled by Bloomberg
Highly-rated firms including Tata Capital Housing Finance Ltd., L-T Finance Ltd
and Fullerton India Credit Co
have sought loans in the global market in recent months.The top-rated non-banking financing companies are able to get loans in the domestic
market as well, but they are finding that borrowing costs are often lower overseas
Investors, especially those from Japan and Taiwan, are happy to lend to them
The ease with which the firms are able to raise funds contrasts with their lower-rated peers, who are struggling to get financing due to
investor concerns about bad debt and defaults in the sector.A dollar loan by Housing Development Finance Corp
in August shows how it often makes sense for financiers to borrow overseas rather than at home.When hedging costs against exchange-rate
moves are included, HDFC needs to pay about 6.7 per cent for its three-year dollar loan
That's lower than the 7.28 per cent coupon on similar-maturity rupee bonds it issued in September.More deals are on their way
Bajaj Finance Ltd., the nation's most valuable consumer financier, is marketing a $575 million-equivalent loan, increasing the pipeline to
more than $1.5 billion for domestic shadow lenders.That comes as average margins for non-state Indian shadow lenders have dropped to a
record 116 basis points over the London interbank offered rate for overseas loan deals signed so far in 2019, compared with 135 for all of
last year, according to data compiled by Bloomberg.Get Breaking news, live coverage, and Latest News from India and around the world on
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