EBRD approves $150 million 5-year loan to Troika Dialog

By Richard Wallis

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The EBRD Board of Directors today approved a project to provide long-term working capital to Troika Dialog, a leading Russian investment bank and an established EBRD client, by lending it up to $150 million. Following this approval, the loan agreement is expected to be signed in the next few weeks.

This confidence-boosting transaction will strengthen this independent financial institution’s funding base and its ability to channel additional liquidity to the Russian stock and bond markets, in which Troika Dialog has long played a key role.

The planned five-year senior loan is part of the Bank’s anti-crisis response. When this deal is signed, it will bring to over $500 million EBRD commitments to the local banking sector in the form of subordinated and other loans since the credit and liquidity squeeze began in Russia last autumn.

The loan terms call for a single repayment at maturity. The facility will consist of two separate tranches and the funding will support Troika’s trading and brokerage activities.

“It will thus contribute to the stability and liquidity of local capital markets while advancing the Bank’s long-term agenda of encouraging the development of financial intermediation in Russia,” said Nicholas Tesseyman, the EBRD’s Business Group Director for Financial Institutions.

Last March, South Africa’s Standard Bank and Troika Dialog Group entered into a strategic alliance under which Standard Bank will become a 33% shareholder in Troika Dialog Group. The EBRD’s loan will dovetail with this new investment by a strategic partner in boosting Troika Dialog’s liquidity, providing comfort to private investors and helping it to reduce dependency on short-term funding.

'We are delighted to take our long term relationship with EBRD to another level. The loan facility shows a vote of confidence in our business model and is a significant step for Troika in diversifying its funding sources and attracting longer term capital,'' said Ruben Vardanian, Chairman and CEO of the Troika Dialog Group.

As well as forging its strategic alliance with Standard Bank, the Troika Dialog Group has taken energetic measures to confront the economic downturn in the last few months by launching new products, cutting costs and adjusting its risk-management procedures and policies to adjust to more stringent market conditions.

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