Syndicated Loan

• 11 Jun 2024

Source: TH

Recently, a private Non-Banking Financial Company (NBFC) announced that it has raised USD 425 million and EURO 40 million through a syndicated loan.

• It is a three-year external commercial borrowing facility structured as a social loan that would be used to empower small entrepreneurs and vulnerable groups across India.
• A syndicated loan is financing offered by a syndicate made up of a group of lenders that work together to provide funds for a borrower.
  • The borrower can be a corporation, a large project, or a sovereign government.
  • Syndicated loans involve large amounts of money, spreading the risk among several financial institutions to reduce the impact if the borrower fails to repay.
• External Commercial Borrowings (ECBs) denote Indian companies borrowing funds from foreign sources, such as loans, bonds, or financial instruments, to finance business expansion, asset acquisition, or existing debt repayment.

Read more: External Commercial Borrowings (ECBs), Non-Banking Financial Company (NBFC)