Russian bank gains firm support

The European Bank for Reconstruction and Development (EBRD) and the IFC have teamed up to raise US$164mn for Russia’s Transcapitalbank.

Each institution is providing a three-year A loan of US$30mn, with the remaining US$104mn coming from a syndicated B loan from 12 commercial banks.

The B loan is priced at 325 basis points over 6-month Libor and is due for a bullet repayment at the end of the first year, but the maturity can be doubled at the syndicate of banks’ discretion.

Furthermore, the EBRD and IFC are lenders of record for the full US$164mn.

The loans will be used to facilitate Transcapitalbank’s return to the international debt markets in order to maintain a diversified funding base and sustain its domestic lending programme to the real sector of the economy.

Amsterdam Trade Bank, Commerzbank, FBN Bank, ING, RZB, Standard Chartered and VTB acted as mandated lead arrangers on the deal.

Other participants on the deal include; AKA Ausfuhrkredit-Gelleschaft as lead arranger, Banque de Commece et de Placements, London Forfaiting Company and RBS as co-arrangers and Adria Bank as manager.

Nick Tesseyman, managing director in charge of the financial institutions sector at the EBRD, says that the deal could lead to further support for the Russian markets: “The success of this transaction shows that a well-run mid-sized Russian private bank, which has proved resistant to the financial and economic crisis, can now once again tap international financial markets for medium-term funding and eventually for longer-term money.”

The IFC’s director for syndications and resource mobilisation, Ritva Laukkanen, adds: “We see significant growth in commercial banks’ interest to provide financing to sustainable Russian private banks. This syndication will send a strong signal to other investors and help re-establish the market for other Russian banks.”

This deal comes within a month of the EBRD arranging a successful syndication for Russian private bank, Promsvyazbank.