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RZB and ZAO Raiffeisenbank Austria, the mandated arrangers, have signed banks into a R360mn/US$9mn dual-currency short-term facility for Russia’s Small Business Credit Bank (closed joint stock company) – KMB Bank.

The facility comprises of two tranches. Tranche A amounts to R360mn (US$12mn). Tranche B amounts to US$9mn. Due to both tranches being over-subscribed, KMB elected to increase both from the initial amounts of R300mn and US$5mn respectively.

The tenor is 12 months with bullet repayment, but can be extended for further 12 months at each lender’s discretion. The rouble tranche pays fixed interest of 14% per year, while the dollar tranche is linked to Libor with a margin of 3.75% per year. Fees remain undisclosed.

Under the rouble tranche participation levels of R90mn, R60mn and R30mn were offered, while the dollar tranche had US$1mn and US$2mn brackets. However, the status of each lender was dependent on the aggregate commitment amount across both tranches (arrangers at US$4mn, co-arrangers at US$3mn, lead managers at US$2mn and managers at US$1mn).

This is the first time since 1998 that the partially convertible Russian rouble has been internationally syndicated.

Tranche A:

Mandated arrangers: RZB (R60mn); ZAO Raiffeisenbank Austria (R30mn)

Arranger: Bank of Moscow (R120mn)

Co-arranger: Garanti Bank Moscow (R60mn)

Lead manager: International Moscow Bank, Moscow (R60mn)

Manager: Yapi Kredi Bank Moscow (R30mn)

Tranche B:

Co-arranger: Banco Nacional Ultramarino (US$3mn), GarantiBank International NV (US$1mn)

Lead manager: WGZ-Bank Westdeutsche Genossenschafts-Zentralbank (US$2mn)

Managers: Europ íisch-Iranische Handelsbank; International Bank of Azerbaijan –

Moscow; an undisclosed investor (US$1mn)

The borrower is part of a wider network of Eastern European microfinance banks successfully carrying out the same mission in Ukraine, Albania, Serbia, Bulgaria, Romania, Bosnia & Herzegovina, Kosovo, Georgia, Moldova and Macedonia.

The shareholders of KMB-BANK, which roots date back 1992, are AAA-rated the European Bank for Reconstruction and Development (EBRD) holding a 35.2% stake, Soros Economic Development Fund (SEDF 35.2%), Germany’s DEG Deutsche Investitions- und Entwicklungsgesellschaft mbH keeping 21.9% and Dutch Stichting Triodos-Doen (STD, 7.7%). There is no free float.