Reliance Jio is reportedly in talks with global banks to raise around $1-1.5 billion through an offshore syndicated loan to buy 5G network gear from Ericsson. The telco intends to leverage these funds to expedite the nationwide deployment of next-generation mobile broadband services by December 2023.
Global lenders such as JPMorgan Chase, Citi, and HSBC are set to arrange around 3-5 year loans for Jio which is likely to be priced above the secured overnight financing rate (SOFR). The pricing of the loans could be around 100-150 basis points above the SOFR.
Additionally, the European export credit agency Finnvera is anticipated to issue guarantees to the lenders, thereby lowering the overall funding costs. Such guarantees will enhance the confidence of foreign lenders and contribute to the reduction of financial burdens associated with extending offshore loans to Jio.
