Jio dials clutch of foreign banks for up to $1.5 billion loan

Reliance Jio Infocomm is in advanced talks with a clutch of bulge-bracket global banks to raise around $1-1.5 billion (Rs 8,200-12,330 crore) through an offshore syndicated loan. The funds will be used to buy 5G network gear from Sweden’s Ericsson as India’s biggest telecom operator looks to roll out next-gen mobile broadband services across the country by December 2023.

The likes of HSBC, JP Morgan Chase and Citi among others are set to arrange an around 3-5 year loan for Jio, which is likely to be priced above the Secured Overnight Financing Rate (SOFR), a new global rate gauge, two people aware of the matter said. The pricing of the loans, they added, could be around 100-150 basis points above the SOFR.

“Discussions are on, and Jio is likely to shortly finalise the appointment of bankers as it prepares to buy 5G radio network equipment from Ericsson,” one of the people cited above told ET.


Separately, European export credit agency Finnvera is likely to issue guarantees to the lenders for extending the offshore loan to Jio. Such guarantees are likely to boost the comfort levels of foreign lenders as it would reduce overall funding costs.

Jio, Ericsson and Citi did not respond to ET’s emailed queries till press time Friday. Helsinki-based Finnvera, HSBC and JP Morgan Chase declined comment.

“From an ECA (export credit agency) perspective, there’s a lot of interest in the western bloc and geographies such as Korea for well-rated firms like Reliance because there is a benefit on both sides. The latest syndicated loan, which comes on the back of a similar round for purchase of Nokia’s gear, will be for at least $1 billion,” a banker said.

Mukesh Ambani-led Jio has been rapidly expanding its 5G coverage since last October and is targeting an all-India rollout by the year-end. It has already rolled out 5G services in around 5,700 cities/towns.

Jio has said it will make a cumulative 5G investment of $25 billion, of which $11 billion was spent on acquiring 5G spectrum.

Brokerage Sanford C. Bernstein expects the balance $14 billion capex to be used across networks assets and customer (premises) equipment.

Jio, which is the sole holder of 5G airwaves in the coveted 700 MHz band, has opted for the standalone mode for its countrywide 5G network rollout. It’s primarily working with European network vendors Ericsson and Nokia for its 5G deployments.