Syndicated Term Loans & Working Capital

Client Background

The 2 companies involved in this transaction are Delhi-based AA- rated NBFCs backed by global equity funds. While the parent group is in the wholesale corporate lending sector and retail consumer lending sector, its group concern in into housing finance, majorly into lending for the affordable housing segment.

Both the groups have remained one of our most prestigious clients. We have raised several rounds of debt (term loan & working capital) for them year-on-year. Coinmen also helped in improving credit rating of the group from BBB to AA- over a period of time and improvised on bank lines from time-to-time so that the groups get the best possible terms aligned to the market and their profile.

Problem Statement

The parent group had a consortium banking arrangement at the personal guarantee of the borrowers, where the arrangement was leading to a delay in financial tie-ups for the group. The cost of borrowing the loan was also relatively high, thereby creating issues for the group’s cash flow management.

Goal Of The Transaction

To achieve a transaction structure which facilitates continuous, cost-effective fundraising with optimal security

Coinmen’s Approach

  • We advised the group company in getting rid of a consortium banking arrangement which was leading to delays in financial tie-up.
  • We created an overall funding plan with major milestones and using the product knowledge, laid down key steps for achieving the required results.
  • Coinmen structured a dual arrangement in the company, with multiple banking and consortium working simultaneously. With careful planning and execution, the consortium was dissolved, and the lenders migrated to multiple banking.
  • Starting from arranging the initial credit line of around INR 1 Billion to the NBFC, we enhanced the limits to around INR 10 Billion, commensurate to the company’s growth and requirements over a period of time.

Outcome Of The Transaction

  • Coinmen helped in systematically improving the credit rating of the company from BBB to AA- over a period of time.
  • We managed to enhance the credit limits from INR 10 bn to INR 100 bn for the group company and eliminated the consortium banking arrangement.
  • Furthermore, we managed to get corporate/personal guarantees waived, as well as ROIs refined in a phased manner, thus enabling higher RoE for the group company.