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
