Chase Manhattan Asia Limited submits an indicative proposal to TISCO for a seven year FX Term Loan Facility.

finance

Description

CHASE SYNDICATED COMMERCIAL LOAN PROPOSAL(1996)

Chase Manhattan Asia Limited submits an indicative proposal to TISCO for a seven year FX Term Loan Facility. Provided below is a summary of terms and conditions for consideration:

Borrower : The Tata Iron & Steel Co. Ltd.

Facility Type : Commercial Loan Facility

Purpose : To finance the commercial portion of financing for the importation of plant and equipment.

Facility Amount : US$100,000,000.

Tenor : 7 years

Repayment : Bullet

Interest Margin : LIBOR + 100bps (6 Monthly payments)

Arrangement Fee : 100bps flat on the Facility Amount (US$ 100 Mn)

Security : First priority charge over assets purchased by the proceeds of the Facility.

Financial Covenants : As applicable

Documentation : Standard provisions for such type of facility including but not limited to negative pledge, pari passu, cross default, representations and warranties, material adverse change, events of default and etc.

Arranger : Chase Manhattan Asia Ltd.

Participating Banks : Member banks of the Syndicate

 

IRR-valuation & Sensitivity Analysis

•Set the net dollar proceeds from the loan

•Set the expected LIBOR from the term structure

•Annualize all other fees and spread

•Set the expected depreciation of the home currency vis-à-vis USD

•Use forward rates, if available, to compute home currency cash flows

•Compute IRR of the cash flows under each LIBOR & USD-INR Scenario

•Determine the most appropriate LIBOR-USD-INR Combination rate over the time horizon

•Select the loan if the resultant IRR meets the company’s financing criteria

•Compare with home currency loan rate for the period 


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