Pasha Bank of Azerbaijan has secured a US$30.25mn club deal.

The transaction marks the first time the bank has tapped the international debt market and the bank hopes it is the first step towards a larger, syndicated loan and the eventual issuance of a Eurobond.

The one-year facility has a margin of 3.5%, but an overall cost of 5.2%, when Libor and fees are accounted for.

Taleh Kazimov, a member of Pasha Bank’s executive board, says the terms of the finance are the best he’s seen for an Azeri bank.

He tells GTR: “We were a bit nervous but it was very good. It wasn’t difficult [to attract the finance] because the main participants are our partners, the banks that know us. From S&P we have the highest rating of the local banks. So generally it wasn’t difficult to attract, everyone knows us. For tenor, we wanted one-year and we got one-year.”

Pasha will use the majority of the finance for liquidity management purposes, but 10 to 15% will be used to fund the trade-related activities of local Azeri companies. While not active in the energy sector, Pasha funds a lot of FMCG, manufacturing and general leasing – mainly on an import basis.

Kazimov says that the ability to claim the finance in US dollars was important, since the bank has a customer base that wants foreign currency for their trade operations.