Moscow Bank for Reconstruction and Development (MBRD) has mandated RZB and ZAO Raiffeisenbank Austria, Moscow (RBRU) to arrange a US$20mn syndicated term loan.

Funds will be used to refinance the borrower’s loans disbursed to its customers, in particular on-lending to its top telecommunications customers. The facility will be launched soon.

The margin is 3% per year, with a commitment fee of 50% of the margin.

The tenor is 364 days with an extension option.

Security involves an ownership clause from MBRD’s parent AFK Sistema, plua a letter of comfort.
Syndication will be launched in early September.

MBRD’s two main business lines are corporate banking and retail banking. Corporate banking currently accounts for the largest proportion of MBRD’s net banking income and is also responsible for most of MBRD’s loans and deposits.

However, in line with its strategy, MBRD is working to increase the volume of retail customers in its combined customer base. MBRD also provides investment banking services and conducts financial markets operations.

As a member of the Sistema Group, MBRD’s principal activity has historically been to serve as the central treasury managing the Sistema Group’s cashflows and to provide a full range of corporate banking services to Sistema Group companies.

In 2003, Fitch Ratings gave MBRD a credit rating of B for short-term borrowing in foreign currency and B- for long-term borrowing in foreign currency with a stable outlook. Both ratings were confirmed by Fitch in 2004. In 2004, Moody’s Investors’ Service gave MBRD a B1 long-term foreign currency and not prime (NP) short-term foreign currency deposit rating.