Debt Syndication
Debt Syndication in INR
GACS is specialized in providing liasoning services for arranging the debts for corporate clients through Public sector, Private & Foreign Banks. Our expert advice in structured finance and result oriented execution helps the corporate to mitigate their funding issues. We arrange debt funding (fund based) by way of Term loans, Working Capital Limits through various banks.
ECB – External Commercial Borrowings
External Commercial Borrowings is also known as ECB. External Commercial Borrowings are commercial loans which are provided by foreign institutional investors. These loans carry a lower rate of interest in comparison to the interest rates which are offered by commercial banks in India. Therefore companies and Public Sector Undertakings (PSU) prefer opting for ECB. For corporates to utilize these loans they have to follow the rules related to ECB Compliance.
In India the interest rates on rupee borrowings are continuously increasing due to rising inflation. The RBI is taking various steps to control the inflation and as a part of that the repo rates are increasing. The banks in India have no option to increase the prime lending rates (PLR)/Base Rates. The cost of borrowing is the major concern for the corporate sector which affects the bottom line.
On the contrary SOFR (Secured Overnight Financing Rate) is substantially at a lower side, where the corporate sector can avail the benefit of low cost funding.
Our Strength
GACS supports the clients in mobilizing the low cost funds through ECB (External Commercial Borrowings) for expansion as well as new projects through foreign banks as well as Public Sector banks through their Foreign Branches across the world. We have direct tie-ups with various bankers for arrangement of this facility. We provide services to the clients to evaluate their projects and give our expert advice in mobilizing the low cost funds through ECB.
As ECBs can be used only for specific commercial purpose, the borrower has to utilise the funds provided by foreign investors carefully. Therefore it is essential to consider the business needs and long term goals of the organisation before opting for ECBs. Non-Compliance with the provisions of ECB will attract a penalty.
As these borrowings can be used only for a specific commercial purpose, there is an End-use requirement. This means that the ECB borrowed can be used only for the purpose mentioned in the End-use. Hence the user must follow the rules related to ECB compliance.
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Global Arm Corporate Services
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