Oil India, the nation’s second-largest state-owned oil and gas explorer, is gearing up to secure a $550 million external commercial loan facility over a five-year term through Bank of Baroda (BoB). This funding aims to facilitate the company’s expansion endeavors into petrochemicals, ethanol, biogas, and renewable energy, as well as support its operational activities. The loan, spanning five years, will be tied to the six-month benchmark secured overnight financing rate (SOFR).
As per news report published by The Economic Times, according to a source familiar with the arrangement, the loan will carry a pricing of 110 basis points above the six-month SOFR rate, subject to reset every six months in accordance with the prevailing SOFR rate at the time. It’s noted that one basis point equals 0.01 percentage point, and the current six-month SOFR stands at around 5.39%. Consequently, the expected final pricing of the deal is estimated to hover around 6.49%. Bank of Baroda has agreed to underwrite the whole amount initially with a possibility of a loan syndication after a few months.
