Mumbai: Delhi International Airport (DIAL) is among a growing list of companies that want to pay bank loans before term and shift to cheaper market borrowing. The company plans to raise more than Rs 1,000-1,500 crore from the bond market to repay a portion of its high-cost loans, two senior bank executives told ET.
Money raised through this route will be 150 to 200 bps lower than the bank rates. "The company has approached banks for a no-objection certificate to raise money through private placement of bonds," said an executive. The bank pays an annual interest of 11.5 per cent to its lenders.
A DIAL spokesperson said, "The points raised are speculative in nature and as a policy we do not comment on speculative news." While banks have lowered their base rate in recent weeks by 25 to 40 basis points, the bond market continues to be a cheaper source for borrowing. For instance, a triple-A-rated corporate can raise money at 8-8.25 per cent from the bond market, lower than State Bank of India's base rate of 9.30 per cent.
09/10/15 Sangita Mehta/Economic Times
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Money raised through this route will be 150 to 200 bps lower than the bank rates. "The company has approached banks for a no-objection certificate to raise money through private placement of bonds," said an executive. The bank pays an annual interest of 11.5 per cent to its lenders.
A DIAL spokesperson said, "The points raised are speculative in nature and as a policy we do not comment on speculative news." While banks have lowered their base rate in recent weeks by 25 to 40 basis points, the bond market continues to be a cheaper source for borrowing. For instance, a triple-A-rated corporate can raise money at 8-8.25 per cent from the bond market, lower than State Bank of India's base rate of 9.30 per cent.
09/10/15 Sangita Mehta/Economic Times
