Reserve Bank of India relaxes takeout financing norms for existing infrastructure loan:
RBI relaxed the norms pertaining to takeout financing vide circular dated August 07, 2014 for existing infrastructure loans by lowering the minimum takeout requirement to 25% from 50%.
As per RBI circular dated August 07, 2014 banks may refinance infrastructure loans by way of full or partial take-out financing, even without a pre-determined agreement with other banks / FIs, and fix a longer repayment period, and the same would not be considered as restructuring in the books of the existing as well as taking over lenders, if the following conditions are satisfied:
i. The aggregate exposure of all institutional lenders to such project should be minimum Rs.10.00 billion;
ii. The project should have started commercial operation after achieving Date of Commencement of Commercial Operation (DCCO);
iii. The total repayment period should not exceed 85% of the initial economic life of the project / concession period in the case of PPP projects and should be fixed by taking into account the life cycle of and cash flows from the project
iv. Loans should be ‘standard’ in the books of the existing banks at the time of the refinancing;
v. A minimum 25% of the outstanding loan by value should be taken over by a new set of lenders from the existing financing banks/Financial Institutions; and
vi. The promoters should bring in additional equity, if required, so as to reduce the debt to make the current debt-equity ratio and Debt Service Coverage Ratio (DSCR) of the project loan acceptable to the banks.
vii. The above facility will be available only once during the life of the existing project loans.
For RBI circular please refer the link below http://rbidocs.rbi.org.in/rdocs/notification/PDFs/167AT082014F.pdf
RBI relaxed the norms pertaining to takeout financing vide circular dated August 07, 2014 for existing infrastructure loans by lowering the minimum takeout requirement to 25% from 50%.
As per RBI circular dated August 07, 2014 banks may refinance infrastructure loans by way of full or partial take-out financing, even without a pre-determined agreement with other banks / FIs, and fix a longer repayment period, and the same would not be considered as restructuring in the books of the existing as well as taking over lenders, if the following conditions are satisfied:
i. The aggregate exposure of all institutional lenders to such project should be minimum Rs.10.00 billion;
ii. The project should have started commercial operation after achieving Date of Commencement of Commercial Operation (DCCO);
iii. The total repayment period should not exceed 85% of the initial economic life of the project / concession period in the case of PPP projects and should be fixed by taking into account the life cycle of and cash flows from the project
iv. Loans should be ‘standard’ in the books of the existing banks at the time of the refinancing;
v. A minimum 25% of the outstanding loan by value should be taken over by a new set of lenders from the existing financing banks/Financial Institutions; and
vi. The promoters should bring in additional equity, if required, so as to reduce the debt to make the current debt-equity ratio and Debt Service Coverage Ratio (DSCR) of the project loan acceptable to the banks.
vii. The above facility will be available only once during the life of the existing project loans.
For RBI circular please refer the link below http://rbidocs.rbi.org.in/rdocs/notification/PDFs/167AT082014F.pdf
