The European Bank for Reconstruction and Development (EBRD) has arranged a US$36mn syndicated loan to Bank Forum one of the largest banks in Ukraine. The loan facility consists of an A loan of US$12mn from EBRD and a B loan of US$24mn.

The facility was fully underwritten by RZB and Standard Bank Plc and attracted good interest from the market resulting in a significant oversubscription.

The B loan was syndicated to nine commercial banks ie, Erste Bank; State Bank of India, Nassau (OBU); HSBC Bank; National City Bank; Banque BIA; Banco Efisa; Hypo Alpe-Adria-Bank International; Raiffeisenlandesbank Niedersterreich-Wien; and Land Bank of Taiwan, Offshore Banking Branch.

The syndicated loan will allow Forum to provide medium-term funding to its clients in Ukraine. It is expected that the size of individual sub-loans under this facility will not exceed US$2mn.

The EBRD was able to increase the B loan by US$4mn in order to accommodate high demand from the market. The resultant oversubscription, however, only partly met the demand of participants.

The loan will provide much needed medium-term funding to Bank Forum for on-lending to its privately owned clients, primarily micro, small and medium companies in a local market where such funding and access to international capital markets is limited.

Since the beginning of its successful cooperation with the EBRD in 2001, Bank Forum has become involved into various EBRD programmes including the Trade Finance Facilitation Programme and SME/MSE lines of credit.

Forum Bank is the first Ukrainian bank to achieve a fully underwritten facility with such a long tenor and has become only the second Ukrainian bank to attract a syndicated loan with the 18-month maturity. This surpasses the one-year threshold currently available for Ukrainian banks of similar size.

The EBRD is the biggest financial investor in Ukraine. As of December 31, 2006 it had committed €2.87bn through more than 130 projects.