New Delhi: Jaguar Land Rover (JLR), the British luxury carmaker owned by Tata Motors, is preparing to raise £2 billion through a five-year syndicated loan from a consortium of global banks. The move is aimed at refinancing upcoming debt obligations due early next year, according to a report.
Shift From Bonds to Bank Loans
Unlike its usual approach of tapping international bond markets, JLR has opted for a syndicated loan this time. The decision comes amid heightened volatility in global bond markets, which has made bond issuance more expensive and less attractive for the company at present.
The loan is expected to be priced at around 155 basis points above the Sterling Overnight Index Average (SONIA), the UK’s benchmark interest rate. With SONIA currently at approximately 3.73%, the effective borrowing cost is estimated to be around 5.28%.
Global Banking Consortium Backs Deal
Around seven major banks are acting as core underwriters for the facility, marking one of JLR’s largest syndicated financing arrangements in recent years. The loan is expected to be further distributed to a broader group of nearly 20 lenders by the end of the month.
The core underwriting group includes major international financial institutions such as DBS Bank, Citibank, Standard Chartered, HSBC, and Mitsubishi UFJ Financial Group (MUFG), all of which have reportedly committed funds to the facility.
The fee structure will differ between core underwriters and participating lenders, with lead banks receiving higher compensation for their commitments and responsibilities.
Financial Pressure and Profit Decline
JLR’s funding move comes during a challenging financial period for the company. It reported a sharp fall in net profit to £14 million in FY26, compared to £2.5 billion in the previous year. The decline has been linked to multiple factors, including US tariffs, weakening demand in China, and a cyberattack in September 2025 that forced a month-long shutdown of production facilities across the UK, Slovakia, Brazil, and India.
Recovery and Previous Support
Despite recent setbacks, JLR returned to profitability in the March quarter after a loss in the December quarter. The company had also secured a £1.5 billion UK government-backed loan guarantee last year to strengthen liquidity during a difficult operating environment.
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