1. Conducting regulatory compliance analysis to determine eligibility and the best window to use

2. Finding suitable overseas or domestic lenders and completing the transaction supporting compliance of all term and conditions

3. Transaction completion (offered to clients where we source the lenders or if the company has already received offers from one or more lenders). The service, which could typically save 0.5-1% per annum, covers

1. Negotiating the spread – we do this by checking pricing with a wide range of global and domestic lenders as also testing the arbitrage with rupee borrowings

We were able to negotiate the spread for a recent client (with a $ 20 million ECB) down by 70 basis points; more typically, the savings would be in the range of 30-40 basis points per annum

2. Vetting the Facility Agreement, seeking prior approval of RBI wherever needed, ensuring Lender Bank issues final Sanction Letter at agreed rate and that the Facility Agreement (including the drawdown schedule) is as per the terms negotiated 

3. Hedging the drawdown – there is often several months between execution of the Facility Agreement and the drawdown of the loan; further, most ECBs have more than one drawdown; this represents a risk to the company if the rupee strengthens before the drawdown and most companies neglect to monitor and manage this risk

We assist companies to manage this risk through the Mecklai Hedge Program (MHP), which is a structured hedging process that (i) is low risk, (ii) uses no market view, and (iii) generates considerable value – over the period 2003 to 2017, MHP generated an average realization that was 72 basis points better than the spot rate on the drawdown date for 6-month exposures

4. Supporting debt disbursement, involving getting the LRN number from RBI through the AD, remitting upfront fees, if any, to the lender, creating security /compliance of CP (condition precedent) and submitting request for loan disbursement and ensuring that documents detailing LIBOR fixing and repayment schedules are in place

5. Managing ISDA documentation and Hedging – ISDA documents can be quite complex and often hide niggling issues that can constrain the borrower; our experienced team will vet the ISDA documents provided by the hedge counterparties to ensure that they are “clean”

We help companies finalize a hedging approach for their ECBs; it is generally best to hedge ECBs at inception to protect the arbitrage that is built in, unless (i) the company has sufficient exports to where the annual gross margin on exports is more than the annual amortization cost (principal and interest), or (ii) the loan is very long term and reasonable hedging prices are not available; of course, even in these cases, it is imperative to monitor and manage the risk

Where it is determined to hedge the risk on the ECB, we assist companies to select the best instruments (cross currency swaps, COS and POS or IRS) and fine tune the timing of the transaction. Most importantly, we assist in negotiating the price, since banks usually try to charge huge spreads on these relatively illiquid instruments. One of our clients with regular ECB activity has been able to reduce his spread for cross-currency swaps to less than 10 basis points from the 100 basis points and above when we first started working with them; in general, we believe savings of 20-30 basis points would be available here

• We execute subsidiary setups in Mauritius & Hongkong along with Group level/Individual company working capital limits setup for Indian entities and subsidiaries through our associated banks in various countries.
• We offer pre & post shipment finance without recourse basis, i.e. we arrange end to end supply chain finance through our partner large shipping company up to 80% of invoice value.
• Confirmation of LCs issued by African Banks on behalf of the African importers, for exporters factoring and LC discounting offered on non recourse basis.
• Special discounting lines available on Asian, Europe, GCC & African countries LCs or SBLCs.