A syndicated loan of up to EUR 75 million extended to Vilniaus Bankas for on-lending to private sector enterprises operating in Lithuania.
The project aims to allow VB to meet the growing demand for bank financing in Lithuania. The proceeds of the loan will be used by VB to lend to private sector enterprises operating in the country.
The aggregate lending to private sector enterprises in Lithuania represents only 10 per cent of the national GDP as opposed to 30 per cent in Estonia and an average 80 per cent in the OECD countries. The need for further banking intermediation is consequently essential for the country’s transition to a market economy. Against this background, it is reasonable to expect that VB’s loan portfolio will continue to grow for at least the next two years alongside progress in the Lithuanian economy and the resulting demand for bank financing. The proposed loan will support VB in meeting such demand.
Vilniaus Bankas (VB) is the largest private sector bank in Lithuania, providing a full range of wholesale commercial banking services and certain types of investment banking services. As of end-1998, the bank reported US$ 700 million in total assets, US$ 109 million in total equity and US$ 15 million in net after-tax income. VB has a network of 15 branches and 871 full-time staff. Its senior debt is rated BB+ by Bank Watch.
Up to EUR 75 million syndicated loan under an EBRD "A" and "B" loan structure. The EBRD is to take up to EUR 25 million of direct exposure under the "A" loan, with the balance to be syndicated among participating banks. Bankgesellschaft Berlin has been mandated by VB as arranger. Hamburgische Landesbank, Landesbank Kiel and American Express have co-arranged an EUR 50 million "B" loan.
Up to EUR 75 million
VB will follow the EBRD's Environmental Procedures for Intermediated Lending through Local Banks in relation to all sub-loans financed through this loan. In implementing these procedures, VB will assess potential environmental issues associated with sub-projects, which are required to comply, at a minimum, with local/national health, safety, environmental and public consultation requirements.
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