Shriram Finance eyes $150 million social loan, HSBC lead arranger

economictimes.indiatimes.com:

Shriram Finance, India's second-biggest standalone non-bank lender by advances, plans to raise at least $150 million through a social loan for which HSBC is the sole mandated lead arranger. The pricing of the loan, which has a tenor of three years, would be around 200 basis points above the Secured Overnight Financing Rate (SOFR), the UK-based bank told ET. One basis point is 0.01 percentage point.

The loan will have a greenshoe option, also of three years, and will likely be scaled up. «Given the upbeat tone on Indian financial institutions currently, Shriram's recent credit rating upgrade and the social loan structure of this transaction, we believe this is a very well-timed transaction and will be received positively by the bank loan market,» Chetan Joshi, managing director and head of debt finance, India, HSBC, said. HSBC will be conducting roadshows to lenders across Singapore, Taiwan and the Middle East for the loan.

The social loan is certified by Netherlands-based Sustainanalytics and qualifies as an Environmental, Social and Governance (ESG) compliant form of lending. The loan would qualify as external commercial borrowing in line with Reserve Bank of India norms. Social loans, which are credit disbursements to fund projects aimed at social causes, are still relatively nascent in the Indian NBFC space.