Tata Motors cuts debt costs with offshore loan

MUMBAI • India’s Tata Motors Ltd, owner of luxury car brand Jaguar Land Rover, is raising funds from the international syndicated loan markets after a gap of almost two years in a bid to lock in one of the lowest borrowing costs for a non-investment grade borrower.

Tata Motors is marketing a £640 million (RM3.56 billion) facility at 104 basis points (bps) more than the Lon- don interbank offered rate (Libor) for a tranche due in July 2022 and 145bps over Libor for obligations maturing July 2023, according to people familiar with the matter.

Group company Tata Chemicals Ltd, rated Ba1 by Moody’s Investors Service Inc and BB+ by Fitch Ratings Ltd, similar to Tata Motors, raised £140 million in 2016 at a margin of 199bps more than Libor.

While pound loans from Indian borrowers are far fewer than borrowings denominated in US dollars, firms belonging to the Tata Group, India’s largest business conglomerate, have raised 86% of their loans in the UK currency since 2006, according to data compiled by Bloomberg.

Borrowers raising funds in pounds usually have links to the UK Accord Healthcare Ltd, a unit of India’s Intas Pharmaceuticals Ltd. — Bloomberg