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EBRD eases Russian mid-cap firms’ access to IPOs and public debt markets
$100 million funding will enable Troika Dialog to offer clients bridge loans
Thanks to a loan of $100 million from the European Bank for Reconstruction and Development to Troika Dialog, a leading Moscow investment firm and brokerage, its mid-sized Russian clients seeking access to capital markets can rely on bridge loans before the money raised from IPOs or bond placements is released.
By setting up a three-year revolving stand-by facility for Troika Dialog, the EBRD is helping to overcome a problem besetting Russian mid-cap firms which need access to short-term financing during the time it takes for local regulators to register new bond or share issues.
Troika Dialog will in each case match the funding provided by the EBRD. Typical clients of this facility will be fast-growing Russian corporates which required fresh capital injections or debt leverage to support ongoing growth and expansion.
Making funding available will encourage more local firms in this category to access capital markets and in turn obliges them to show greater transparency and improve corporate governance, EBRD President Jean Lemierre said.
It would also encourage competition and contribute to the development of financial intermediation in Russia. At present, most such companies rely on bank borrowing to finance their investment needs.
The EBRD is particularly pleased to cooperate on this project with Troika Dialog, which not only specializes in providing capital market services to Russian companies but which also has a wide regional reach through its network of offices, Mr. Lemierre added.
In 2006, the EBRD committed $35 million to the Troika-sponsored Russian New Growth Fund whose management company is a joint venture between Troika Dialog and Singapore’s Temasek group.
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