Russia’s National Factoring Company (NFC) has agreed a one-year US$50mn syndicated factoring receivables-backed short-term loan facility, arranged by Standard Bank Plc and ZAO Standard Bank as mandated lead arrangers.

As NFC’s inaugural syndicated facility in the international capital markets the transaction was well received and generated an oversubscription in the market though the facility amount was not increased.

Some nine banks joined the syndicate during the general syndication stage of the transaction.

Proceeds will be used for refinancing existing factoring contracts and financing of new factoring contracts.

The interest rate is Libor + 1.90% per year.

Security involves first priority assignment by NFC of all rights and benefits under the factoring contracts, including (i) notices of assignment and enforcement that shall be distributed to each customer and debtor should an event of default be called, (ii) notices on the change of payment details containing details of the borrower’s collection account;
direct debit right/withdrawal agreement for the collection accounts with ZAO Standard Bank.

This is NFC’s first visit to the international syndicated loan market with the funds being utilised to finance its factoring operations in Russia.

NFC was the first dedicated professional factoring team to be established  in Russia  and can track its operating history back to 1999. Factoring is a relatively new but fast growing business segment in Russia supporting domestic and international trade.