Satin CreditCare to Raise $5 Million Via Issue of Bonds

Satin Creditcare Network, a microfinance company, has announced plans to raise $5 million through a bond issuance at an all-inclusive cost of 11.32%. The proposed bonds are scheduled to be issued on September 25 and will mature after 36 months, as disclosed in a regulatory filing to stock exchanges.

The coupon rate for the bonds is set at 7.9%, which is linked to the secured overnight financing rate (SOFR). This translates to an all-inclusive cost of 11.32%, factoring in the hedging cost, as confirmed by a senior company official. The coupon rate is fixed at 335 basis points above the six-month SOFR.

The interest payments on the bonds will be made semi-annually. Upon maturity, Satin Creditcare Network will redeem the bonds on a pari passu basis by repaying the outstanding principal amounts.

Previously, the company successfully closed its first Pass-Through Certificate (PTC) transaction with HSBC India. The transaction, valued at INR 119.12 crore, was concluded with a coupon rate of 9.30%

The translation uses a par structure, with the loan pool issued to the trust for 87.5% of its principal. The trust will issue Series A1 PTCs for 87.5% and use 12.5% of the initial pool principal as over-collateralisation. According to the deal documentation, the agreement is scheduled to mature in August 2026.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.