PFC (Power Finance Corporation), a Maharatna company and leading NBFC in the Indian power and infrastructure sector, announced the successful closing of issuance of the largest-ever foreign currency term loan from an Indian PSU amounting to USD 1.265 billion. This landmark transaction was executed through a facility agreement with multiple banks based in IFSC GIFT City, Gandhinagar.
Objective of the Loan
- The loan will primarily finance assets other than thermal generation projects, aligning with PFC’s commitment to promoting renewable energy.
- It aims to support PFC in expanding its operations, enhancing market presence, diversifying funding sources, and maintaining a competitive edge in the industry.
Loan Details
- The loan features a floating interest rate, currently at an average rate of 4.21% per annum.
- It is denominated in G3 currencies: USD, EUR, and JPY.
- The loan has a 5-year tenor and is linked to external benchmark rates, including:
- SOFR (Secured Overnight Financing Rate) for USD.
- EURIBOR (Euro Interbank Offered Rate) for EUR.
- TONA (Tokyo Overnight Average) for JPY.
Banking Partners
- The major bankers involved in this issuance include SBI, IDBI, Axis Bank, MUFG, Deutsche Bank, and SMBC.
- SBI served as the largest lender and acted as the facility agent for this landmark transaction.
About PFC
- Power Finance Corporation Ltd. (PFC) is an Indian central public sector undertaking owned by the Ministry of Power, Government of India.
- Established in 1986, it is the financial backbone of the Indian power sector.
- PFC has been providing financial assistance to power projects across India including generation, transmission, distribution and RM&U (Renovation, Modernization, and Uprating) projects.
- Recently, it began financing other infrastructure projects which have backward linkages to the power sector like coal mine development, fuel transportation, oil & gas pipelines, etc.