Well with almost one billion dollars of convertible bonds to repay by march, Indian billionaire Anil Ambani is once again knocking the Chinese lenders after Reliance commuication value got lower in less than a year.

Anil Ambani's Reliance communication is planning to borrow a sum of $1.18 billion from the lenders like China Development Bank Corp, Export-Import Bank of China and Industrial & Commercial Bank of China which will lead the organziation to recover a convertible debt  maturing on March 1.Presently these shares are trading 87 percent lower the price at which the notes can be switched to equity as quoted by the one of the spokesman of Reliance communication.

The Chinese loans will help Reliance Communications cap its interest expense for the borrowing at 5 percent even after dollar funding costs for Indian companies rose 171 basis points in 2011 to 6.83 percent, according to HSBC Holdings Plc. The credit helps China expand its role in the world’s second-fastest growing major economy that’s also competing with the north Asian nation for resources, said Erica Downs, a fellow at The Brookings Institution.

“Without the Chinese, they would have been in big trouble,” said Juergen Maier, a Vienna-based fund manager at Raiffeisen Capital Management that oversees about $1.1 billion of emerging-market assets. “The Chinese are the last lenders left that will lend them large amounts of money at reasonable interest rates.”

Reliance Communications shares gained 1.9 percent to 90.5 rupees in Mumbai at 10:30 a.m., compared with a conversion price of 661 rupees for the debt. The shares declined 52 percent in dollar terms last year making it the worst-performing stock in the 28-member MSCI AC Asia Pacific, excluding-Japan, Telecommunication Services Index.

The yield on the Mumbai-based company’s notes issued in 2007 dropped 19 percentage points to 11.78 percent yesterday, the lowest level since June 9, according to prices provided by Barclays Plc. Indian companies have a record $5.3 billion of convertible notes maturing this year, according to data compiled by Bloomberg.

“If Reliance Communications had defaulted, the whole Indian convertible market would have collapsed,” Raj Kothari, a convertible trader at Sun Global Investments Ltd. in London, said in a telephone interview. “Sentiment has improved in Indian convertibles and we are seeing buying interest from investors.”

The loan to Reliance Communications will have an “extended” seven-year maturity with an interest cost of 5 percent, according to yesterday’s statement.

The transaction “can at best be seen as an indicator of Reliance Communications ability to raise debt in the market, or a stamp of confidence in Reliance Communications by the Chinese banks,” Rohit Chordia and Shyam M, analysts at Kotak Institutional Equities, wrote in a note to clients today. The company’s “balance sheet remains stretched.”

The company, which had its credit rating cut one notch to the third-highest level by ICRA Ltd. (ICRA), the local unit of Moody’s Investors Service in June, has $4.8 billion of debt due by 2021, Bloomberg data show.

Reliance Communications’ earnings before tax would have slumped 50 percent in the year ending March had the mobile- phone operator refinanced its debt at the 12 percent rate that AAA-rated corporates have to pay on rupee-denominated loans, Edelweiss Securities Ltd. wrote in a note to clients on Nov. 22

Ambani sought help from Chinese lenders last year as well. Reliance Communications on March 9 said it will borrow 87 billion rupees from a group led by China Development Bank to refinance the purchase of third-generation airwaves and buy equipment.

Ambani’s Reliance Power Ltd. (RPWR) on Sept. 30 got approval from India’s central bank to borrow $1.1 billion from Chinese lenders to build a 3,960-megawatt power project. Ambani’s companies have agreed to borrow as much as $15 billion from lenders in the north Asian nation.

Ambani signed an agreement in October 2010 to borrow as much as $12 billion from Chinese banks to buy power equipment from Shanghai Electric Group for Reliance Power even as India’s power ministry endorsed a plan last month to triple import duty to help local manufacturers compete with Chinese rivals.

On January 11 a fellow named as Erica Downs at the John L. Thornton China Center at the Washington, D.C.-based Brookings Institution mentioned that the Chinese banks attempt and make equal two aims to extend their loan document and if that can occur meantime assisting Chinese diplomacy, then it’s fair and excellent.China Development Bank, as a state bank, think of themselves as a type of development finance corporation, and borrowers see them as a lender of last resort.