As per reports, bankers underwriting loan to Tata Steel to acquire Anglo-Dutch steelmaker Corus have cut the price of one tranche of debt to be floated in the market to 99.25% of face value from 100%. Tata steel will now have to pay 50 basis points more on this tranche of $1 billion with a seven-year tenure. Tata Steel is mopping up $7.3 billion to fund its $13 billion-acquisition of Corus. The loan’s underwriters are ABN Amro, Citigroup and Standard Chartered.
The move came after institutional investors, the loan’s original target market, have been reluctant to join amid current credit market volatility arising from US sub-prime mortgage woes.