Air India SPV gets waiver on sovereign guarantee clause
In a bid to check high borrowing costs for Air India Asset Holding (AIAHL), the government has exempted the special purpose vehicle from a clause that makes sovereign guarantee on government bonds non-transferable in case of change of ownership of the company.
AIAHL, which houses `29,464 crore of the national carrier’s debt, is looking to raise around `22,000 crore through government-backed and government-serviced bonds.
A senior government official said the ministry of finance waived off the condition as it would have increased the cost of borrowing on government-guaranteed bonds. Under this condition, the sovereign guarantee ceases to exist if the ownership of the entity is changed.
