Corporate
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Corporate Funding
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History Team Partners |
Foreign Currency Term Loans (FCTLs or FCLs) What are FCTLs/ FCLs? These are Term Loans, denominated in foreign currency,
the repayment of principal and interest also being in foreign currency.
These are loans taken to fund a new project, expansion, purchase of fixed
assets like plant and machinery, etc.
These loans come with specified term (period) of repayment,
usually between 3-7 years. The
installments are usually payable every quarter, though other periods like
monthly, half yearly can be negotiated.
FCTLs/ FCLs are similar to External
Commercial Borrowings
(ECBs), however, the difference is that while ECBs are
directly negotiated with overseas lenders, FCTLs are negotiated and
contracted by large, Indian banks and distributed to local, Indian companies. Who is Eligible? All business
organizations, proprietary, partnerships, private and public limited
companies are eligible. A good
business track record is desirable. In
order to avail this the project should involve significant imports; The loan
should be for a new project (me replacement
of costly Indian debt by cheaper foreign debt is not permitted by RBI); The project should have reasonable
foreign currency earnings, say by way of exports! Interest Rates Why should an Indian
enterprise opt for an FCTL? The reason is that interest rates are lower
(presently 5-6%). Further, the foreign exchange risk, which is inherent in a
foreign currency loan is usually hedged, which costs another 2-2.5%.
Including the Indian bank’s profit margin, the overall cost of borrowing presently
comes to about 9%, which is still cheaper by a good 25%, compared to a Minimum Size of TLs we can
handle: o
Proposals from National Capital Region (NCR) of Delhi:
Minimum: Any Size;
Maximum: Any Size o
Other cities/ towns of the Northern Region:
Minimum 10 Cr, Maximum: Any Size o
Other cities/ towns of Rest of India: Minimum 25
Cr, Maximum: Any Size
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Professionals
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Tel: 0124-4386541, 4105424; Cell: P.Anand (Director) 09312636681, Suresh Sharma (Sr.
Associate) 09310636681. anand @ acebuiss.com / sales @ acebuiss.com SERVICE, ANYWHERE IN INDIA, AT YOUR DOORSTEP |
Pioneers
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