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EBRD helps Russian regional bank access international capital markets
NBD Bank $20 million syndicated loan to fund micro, small and medium-sized businesses
One of the oldest participants in the EBRD’s lending programme for Russian small businesses, NBD Bank, has raised its first purely international syndicated loan, securing $5 million from the European Bank for Reconstruction and Development and $15 million from a consortium of eight commercial banks.
The new funding will support a bid by NBD Bank to develop into a strong regional player financing micro, small and medium-sized enterprises in the Volga Federal district. The EBRD has a 25 percent plus one share voting equity stake in NBD Bank, which is registered in Nizhny Novgorod, one of Russia’s most economically advanced regions.
Under an EBRD A/B loan structure, the Bank remains the lender of record for the full $20 million, but has syndicated $15 million to eight international banks for an 18-month facility (with an option to extend it for a further 18 months). The EBRD has kept the remaining $5 million on its own books as the A portion of the loan, which has a three-year maturity.
The B loan has been priced at 260 basis points over LIBOR and the participating banks are:
• Bank Leumi Le Israel B.M.
• National City Bank
• Raiffeisen Zentralbank Österreich A.G.
• State Bank of India, Nassau (OBU)
• WGZ BANK AG Westdeutsche Genossenschafts-Zentralbank
• Banco Efisa S.A.
• Land Bank of Taiwan, Offshore banking Branch
• Mega International Commercial Bank Co. Ltd., London Branch
The loan not only diversifies NBD Bank’s funding base by giving it access to international capital markets, but assists its asset-liability management by considerably extending the maturity of its funding. In November 2006, NBD Bank launched its first syndicated loan on the domestic Russian market, raising 300 million roubles with a one year maturity (with an option to extend it for a further year).
NBD Bank was one of the first to join the EBRD’s Russia Small Business Fund lending programme in 1994 and has since developed a strong local franchise, specialising in loans to micro, small and medium-sized businesses. It is one of the three largest banks in the Nizhny Novgorod region.
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