OREANDA-NEWS. December 19, 2007. One of the oldest participants in the EBRD’s lending programme for Russian small businesses, NBD Bank, has raised its first purely international syndicated loan, securing $5 million from the European Bank for Reconstruction and Development and $15 million from a consortium of eight commercial banks, reported the press-centre of EBRD.

The new funding will support a bid by NBD Bank to develop into a strong regional player financing micro, small and medium-sized enterprises in the Volga Federal district. The EBRD has a 25 percent plus one share voting equity stake in NBD Bank, which is registered in Nizhny Novgorod, one of Russia’s most economically advanced regions.

Under an EBRD A/B loan structure, the Bank remains the lender of record for the full $20 million, but has syndicated $15 million to eight international banks for an 18-month facility (with an option to extend it for a further 18 months). The EBRD has kept the remaining $5 million on its own books as the A portion of the loan, which has a three-year maturity.

The B loan has been priced at 260 basis points over LIBOR and the participating banks are:

Bank Leumi Le Israel B.M.
National City Bank
Raiffeisen Zentralbank Osterreich A.G.
State Bank of India, Nassau (OBU)
WGZ BANK AG Westdeutsche Genossenschafts-Zentralbank
Banco Efisa S.A.
Land Bank of Taiwan, Offshore banking Branch
Mega International Commercial Bank Co. Ltd., London Branch

The loan not only diversifies NBD Bank’s funding base by giving it access to international capital markets, but assists its asset-liability management by considerably extending the maturity of its funding. In November 2006, NBD Bank launched its first syndicated loan on the domestic Russian market, raising 300 million roubles with a one year maturity (with an option to extend it for a further year).

NBD Bank was one of the first to join the EBRD’s Russia Small Business Fund lending programme in 1994 and has since developed a strong local franchise, specialising in loans to micro, small and medium-sized businesses. It is one of the three largest banks in the Nizhny Novgorod region.