An EBRD loan for Russia’s Transcapitalbank (TCB), which has just closed, marks the first time an institution with a specific mandate to act as a socially responsible lender is participating as a co-financier to raise funds for a Russian borrower.
Bank im Bistum Essen eG, a German cooperative bank committed to socially responsible lending, has taken up the entire USD 3 million B loan raised by the EBRD as part of a USD 13 million financing package for TCB, a medium-sized Russian banking client.
To date, the EBRD’s partners in such transactions have traditionally been commercial banks.
The EBRD is the lender of record for the full amount of USD 13 million and is taking a 4.5-year USD 10 million A loan onto its own books. The pricing of the three-year B loan is 4.0 percent over 6-month LIBOR. These relatively long maturities will allow TCB to give longer-term loans to its small business clients, particularly in the regions.
This funding will be used to finance TCB’s lending to small and medium-sized enterprises (SME’s) using criteria worked out by the EBRD’s for its oldest and largest SME programme, the Russia Small Business Fund (RSBF). It is precisely this use of funds to benefit small businesses which attracted this German cooperative bank
Founded in 1992, TCB ranks as Russia’s 49th largest bank as measured by assets with a traditional focus on mid-sized corporate clients and micro, small and medium-sized businesses which are key to the bank’s business plan. TCB is present in 18 of the country’s 83 regions.
The EBRD has been a TCB shareholder since 2006 and now holds a 28.6 percent stake.
In July 2010, the EBRD and IFC, which is also a shareholder of TCB, jointly raised USD 164 million for Trancapitalbank, including through a USD 104 million syndication to commercial banks, one of the first for mid-cap Russian banks after the 2008-2009 crisis.
The maturity of that earlier B loan was one year, but was extended at an unchanged margin for a further year earlier in 2011. The margin of the 2010 B loan was 3.25 percent over 6-month LIBOR.