BTA breaks new ground

Between January and July 2008, Kazakhstan’s BTA Bank arranged a financing package to support the construction of a glass plant in Aleksin city, the second largest industrial city in Tula in central Russia.

BTA acted as the borrower for the financing facility, which consisted of six different tranches, before on-lending the financing to sub-borrower Russian glass manufacturer Aleksinskoe Steklo.

The deal points to an acceleration in BTA’s non-Kazakhstan trade finance activities.

As the project involved several different suppliers of equipment, the transaction was structured through various tranches supported by export credit agencies (ECAs), Sace and Coface.

The equipment was being provided by Italian firms Glass Technologies, Zecchetti, BDF Industries, Comair, Car-Met and French firm SGCC.

Under the terms of the loan agreements, the equipment was financed through ECA-backed letters of credit, as well as by uncovered commercial loans for financing of downpayments. The Sace-backed transactions feature a tenor of seven years, while the Coface portion has a five-year tenor. The commercial loans have tenors ranging from two to three years.

The ECAs are providing 85% cover on each of the various contracts signed with the exporting companies.

Acting as lenders for the different contracts are Banca Agricola Mantovana and Banca Populare di Vincenza.

The facility package stands out in the market as it features low pricing under all of the tranches, with no commitment fee charged under the ECA facilities.

The deal also heralds a diversification of BTA’s customer base, marking the Kazakh bank’s expansion of its trade finance capabilities into new markets outside of Kazakhstan.

Dinara Raizhanova, financial institutions and global trade finance at BTA Bank, comments: “The realisation of this transaction is in line with BTA’s strategy to become a leading bank in the CIS, and it confirms that BTA can be competitive not only in the Kazakh market, but in the CIS as well.”

BTA Bank has international representative offices in Ukraine, Russia, UAE and China. In January 2008, the bank changed its name to BTA Bank from its previous name Bank TuranAlem.

Aleksinskoe Steklo was established in 2006, and it produces various forms of glass used in the beverage and food industries. The new glass plant is being built to meet increased demand for glass from the region’s industries.

Deal Information

Borrower: BTA Bank
Sub-borrower: Aleksinskoe Steklo
Amount: €15,645,273.36
Mandated lead arrangers: Banca Agricola Mantovana; Banca Popolare De Vicenza
Law firm: In-house counsel
Tenor: 7 years
Date signed: July 2008