Indian companies lured by Japan’s near-record low interest rates and easier availability of funds are raising the most yen-denominated loans in more than a decade as dollar lenders turn cautious. While Samurai loans still make up only a small portion of Indian firms’ total foreign-currency facilities, coming to more than 6 percent this year, they are growing in importance for borrowers. Highly rated Indian companies are turning to Samurai loans as overseas banks become more reluctant to extend dollar funds amid impending interest-rate hikes in the U.S. and turbulence in Turkey and Argentina. Most lenders in the South Asian nation, battling the highest bad-debt ratios since 2000, are also unwilling to make longer-tenor domestic loans. That’s helped Japanese currency-denominated facilities surge in 2018. The proportion of yen facilities to total foreign-currency loans of Indian firms has risen to more than 6 percent this year from over 4 percent in 2017.

(Financial Express)