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$125 million EBRD loan to stimulate Russian banking sector
15 international banks participate in loan to Russian offshoots of Societe Generale
The European Bank for Reconstruction and Development is lending two Russian
affiliates of France’s Societe Generale up to $125 million to help private
Russian companies gain access to medium-term credit and stimulate the growth
of retail lending, leasing and mortgages.
The EBRD is advancing up to $75 million for five years for on-lending to
Russian companies and the retail market by Banque Societe Generale Vostok
(BSGV), $25 million for 12 years to finance residential lending by BSGV, and
up to $25 million for five years to fund leasing deals for private Russian
companies through BSGV Leasing.
The transaction attracted exceptionally strong interest from commercial
lenders, with $65 million of the loan – excluding the mortgage portion –
syndicated to a group of 15 international banks under an A/B loan structure.
The B loan was oversubscribed by nearly 50 percent. The portion of the loan
syndicated to commercial banks has a three-year maturity plus an extension
option for an additional two years at each lender’s discretion.
EBRD President Jean Lemierre stressed that financial intermediation is still
weak in Russia and that increasing competition in the Russian banking, leasing
and mortgage markets is a key element of the Bank’s strategy.
It should lead to lower lending margins and thus cut the cost of borrowing for
investments in the local economy, according to Mr Lemierre. We also hope that
the lead taken by the EBRD in syndicating part of this transaction will mark a
turning point in attracting commercial funding for the Russian medium and
long-term debt markets, he added.
The EBRD will take onto its books the A loan of $35 million, while the B loan
of $65 million was successfully syndicated as follows:
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Germany’s Bankgesellschaft Berlin AG, Spain’s Caja Madrid, Canada’s
International Finance Participation Trust (IFPT), Germany’s LRP Landesbank
Rheinland-Pfalz, NordLB and WGZ-Bank, as well as Greece’s Piraeus Bank, London
Branch, Japan’s Sumitomo Mitsui Banking Corporation Europe Limited, Portugal’s
Caixa Geral de Depositos, New York Branch, and Austria’s Erste Bank
(Co-Arrangers)
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Germany’s HSH Nordbank AG, Austria’s Raiffeisen Landesbank Oberösterreich and
Österreichische Volksbanken-AG, as well as the State Bank of India, Nassau
(OBU) (Lead Managers)
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Austria’s Bank für Arbeit und Wirtschaft (Manager).
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