MTN programme upsized


Shri Ram Finance

Shriram Transport Finance Co Ltd’s (STFC) upsizing of its multi-currency global medium-term notes (MTN) program will further diversify its funding profile. STFC has upsized the program to US$3 billion from US$2 billion.

S&P Global Ratings believes STFC will continue to tap international bond markets.

The company has diversified its sources through overseas and domestic retail bond issuances in the past year, said S&P on 2 Jan 2020.

Overseas debt increased to 12% of total borrowings as of Sept. 30, 2019, from 3% a year ago.

STFC has also relied on securitization during this time, which increased to 25% of borrowings from 19%.

“In our view, domestic funding and liquidity conditions remain tight given the cycle of easy liquidity and low cost of funds has reversed for Indian finance companies in the past year,” said S&P.

The program rating remains unchanged at ‘BB+’.

“We equalize the rating on the program with the long-term issuer credit rating on STFC (BB+/Negative/B). The notes under the program are direct and unconditional obligations of STFC.

“They are secured and will rank equally, without any preference among themselves, with all other outstanding secured and unsubordinated obligations of the issuer,” said the rating agency.


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