Air India raises $215 million loan from Bank of India and Standard Chartered

Air India has secured a loan of about $215 million, around INR 1,790 crore from Bank of India and Standard Chartered Plc to refinance some of its existing borrowings, according to people aware of the deal.

The financing has been structured as a six-year loan through Gujarat International Finance-Tec City (GIFT City), India’s emerging financial hub in Gandhinagar, Gujarat. The loan is priced at nearly 168 basis points (1.68%) above the Secured Overnight Financing Rate (SOFR), a global benchmark for dollar-based loans.

The funds will mainly be used to refinance short-term loans that Air India had previously taken to acquire six Boeing 777-300ER aircraft. By converting this debt into a longer tenure loan, the airline will ease its repayment pressure and strengthen its financial position.

Bloomberg had earlier reported in July that Air India was in talks to raise around $200 million in bank loans.

Negotiations for this loan had initially slowed down after a tragic Air India plane crash in June, which became one of the country’s worst aviation accidents in recent years.

Despite this setback, the airline has now been able to move forward and successfully close the financing deal.

For Bank of India, this marks an important milestone as it is the first time the bank has acted as a mandated lead manager for a loan deal through GIFT City, according to people familiar with the matter. Standard Chartered also participated in the transaction.

This development highlights how Indian airlines are increasingly using GIFT City’s global financing framework to raise competitive foreign currency loans and refinance their high-cost debt.