OREANDA-NEWS. July 02, 2007. ABN AMRO Bank N.V. ("ABN AMRO") funded a $200 million subordinated loan to OJSC Russian Agricultural Bank ("RAB") in the 10-year non-call five format, reported the press-centre of RAB.

On 29th June 2007 RAB received the approval of the Central Bank of Russia (CBR) to include the loan into regulatory capital, which should not exceed 100 per cent. of its Tier 1 capital.

This is the first loan of this kind to be successfully funded and approved in Russia by the CBR. In the international debt capital markets the subordinated loan has similar characteristics to Upper Tier 2 subordinated debt, as defined by Basel rules. Until now Russian banks were permitted to raise subordinated debt that was limited to 50 per cent. of their Tier 1 capital. Basel guidelines classified those loans as Lower Tier 2 subordinated debt.

RAB has worked closely with ABN AMRO to structure this instrument in a very short timeframe and ensure that it would qualify as regulatory capital.