Our Corporate Credit Services Unit is committed to meeting financial requirements and providing financial solutions to corporate and conglomerate customers.
The financing requirement may be fulfilled solely by the bank or through a consortium arrangement. Over the years, our Corporate Credit Services unit has been successful in building and maintaining diversified credit portfolios in various lending sectors such as agriculture, manufacturing, energy, construction, transport, information technology, trading, tourism, etc.
- Project Financing
Project finance is the financing of long-term infrastructure, industrial projects, and public services based on a non-recourse or limited recourse financial structure in which the project debt and equity used to finance the project are paid back from the cash flow generated by the project. Project financing is a loan structure that relies primarily on the project's cash flow for repayment, with the project's assets, rights, and interests held as secondary security or collateral.
- Trade Finance
Trade finance refers to the process of financing certain activities related to commerce and international trade. Trade finance includes activities such as lending, issuing letters of credit, factoring, export credit, and insurance. Companies involved with trade finance include importers and exporters, banks and financiers, insurers, export credit agencies, and other service providers.
- Term Loan Finance
Term loan facilities are granted to businesses for financing the creation of assets, mainly of a fixed nature. Drawings are normally made in a lump sum or in multiple tranches based on the nature of the transaction(s), remaining within the approved limit. Term loans typically have a maturity of more than one year. Term loans are repaid over the loan tenor on an equal installment basis or in ballooning installments designed based on the cash flow generation of the businesses. Term loans are typically secured loans, with the primary security being the assets purchased with the Term Loan amount, and the bank may seek additional security to protect itself from risk.
- Working Capital Finance
Working capital finance is a loan that has the purpose of financing the day-to-day operations of a company. This loan is usually financed against the net current assets of the company and is used to manage the cash flow gap of the business. However, working capital loans should not be utilized as a long-term funding option for buying long-term assets or for investment purposes. Companies that have cyclical or seasonal sales usually rely on working capital loans to help with periods of reduced business activity.
Syndicated Loan Arrangement /Consortium Lending
In a syndicated loan arrangement or consortium lending, several banks or financial institutions form a syndication to finance a single borrower with a common objective, appraisal, and documentation, including joint supervision and follow-up exercises. A common agreement governs the consortium's financing participation, pricing terms, fund utilization and monitoring, repayment modalities, securities to be obtained, and so on. The borrower company gives a mandate to a bank to lead the consortium, which is commonly referred to as the "Lead Bank," which is responsible for managing the functioning of the consortium. Pari-passu (proportionate) charges will be created on securities offered by the borrower company against the total credit extended by all the lending banks of the consortium.