International Joint Venture and Merger & Acquisitions

International Debt Financing

International Debt Financing

In current scenarios of globalization, cross-border transactions have become a part of routine business operations for corporates and External Commercial Borrowing (ECB) is one of the most common modes of financing such transactions. External Commercial Borrowing is an instrument used in India that facilitates access to foreign money by Indian Corporations and PSUs. ECBs include commercial bank loans, buyers’ credit, suppliers’ credit, securitized instruments such as floating rate notes and fixed rate bonds etc., credit from official export credit agencies and commercial borrowings from the private sector window of multilateral financial Institutions. Indian Government has permitted ECBs for providing additional source of funds to the corporates for financing the expansion of existing capacity as well as for fresh investment, to augment the resources available domestically.

ECBs can be used for any purpose except for investment in stock market and speculation in real estate. In case of infrastructure and Greenfield projects, funding up to 50% is allowed through ECB. Same goes with the telecom sector too. Recently rupee interest rates have been traditionally much higher than rates prevailing in the international markets. Therefore, under these circumstances, it makes more sense to borrow in currencies other than rupee to take advantage of lower interest rate.

How ILO Consulting can help?

Our global team of investment banking professionals has a track record of helping its clients raise capital from financing sources by creating a competitive process to achieve the best combination of proceeds, pricing and terms. Our team performs a detailed study and examines all factors of industry, economy and business. Our strong relationships with global financial institutions such as in USA, Europe, China, Turkey and Japan along with a highly experienced division help us to design a customized financing solution for our clients.

Our role includes:

  • Identification and approach of potential lenders
  • Full execution services, including preparation of funding plan and financial model; advice on transaction structure and strategy; managing communication and interaction with lenders; overseeing due diligence; negotiations of lending terms and legal documentation

Usually ECB and other funding for India would comprise of 3months LIBOR + the rate of interest that the bank requires plus insurance to cover political and financial risk. ILO Consulting is experienced in helping management teams, corporates and private shareholders raise finance.  Our experts will guide you throughout the whole process, from identifying the most appropriate forms of finance, through to the final negotiations. With strong global network of experienced specialists on the ground, we provide a broad geographic footprint with strong investor relationships in both developed and important growth economies.

Globalization has now opened various options for raising capital but selecting the fund raising solution which is suitable for your business requirements can be tricky hence, it’s better to have an advisor who can help in weighing the risks and benefits of individual available structure. ILO Consulting can help you navigate through the complexities of all the financing options and suggest a cost effective solution for your funding requirements. For further information, please fill the contact us form and our team will reach out to you at the earliest.

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