EBRD revives Belarus syndicated loan market

By Richard Wallis

The EBRD has arranged EUR 30 million five-year syndicated loan to boost micro, small and medium (MSME) business lending by its long-standing client Belgazprombank (BGPB) in a landmark transaction that includes the longest maturity for a Belarusian loan syndication since 2010.

The EBRD, which is the lender of record for the full amount, is providing an A loan of EUR 10 million, while the remaining EUR 20 million B loan is coming from The European Fund for Southeast Europe (EFSE). Both the EBRD A loan and the syndicated B loan portion will have an identical five-year maturity.

The EFSE brings together private and public sources of financing to provide sustainable funding to micro and small enterprises and also acts as a platform coordinating donor activities in southeast Europe.

The syndicated loan market for Belarusian borrowers has been subdued since the start of the global financial crisis and has been mainly limited to the tapping of short-term funds by state-owned banks.

Since the start of 2010, three Belarusian state-owned banks have tapped the market for international syndicated loans. The maturities in each case were no longer than one year.

Apart from granting BGPB access to the syndicated loan market, this transaction will assist this EBRD client in diversifying its funding base and lengthen the maturity profile of its balance sheet.

On a broader level, the EBRD’s success in putting together a syndication providing much longer term funding than what has been available in recent years could act as a catalyst in mobilising external finance and increasing the access of Belarusian banks to foreign capital.

Belgazprombank, established in 1990 and controlled by Russia’s Gazprom group, started cooperation with EBRD in 1997. At the end of June 2013, it ranked as the seventh largest bank in Belarus as measured by assets. It is a leading EBRD partner in Belarus and is one of the main players in the country’s MSME lending segment.