OREANDA-NEWS. June 02, 2010. In a substantially oversubscribed transaction, the EBRD has raised USD250 million for Russia’s Promsvyazbank under an A/B Loan structure -- with the participation of 11 international commercial banks demonstrating a recovery in the market for Russian syndicated loans, which shrank dramatically at the height of the recent turmoil, reported the press-centre of EBRD.

The EBRD has always remained active in raising Russian syndicated loans, irrespective of prevailing conditions, and is proud to have arranged this deal which met with very strong market support for a long-standing client of the Bank, said Lorenz Jorgensen, the EBRD’s Director of Loan Syndications.

The EBRD is the lender of record for the full USD250 million of the new loan and used its own funds to raise the USD100 million A portion, which will have a three-year maturity. The maturity of the USD150 million B loan syndicated to commercial banks will be one year.

The B loan carries a margin of 2.75 percent a year over 3-month LIBOR. The B loan’s Mandated Lead Arrangers, in what is a club deal, include Commerzbank AG, Credit Suisse AG, HSBC Bank plc, ING Bank N.V., Oversea-Chinese Banking Corporation Limited, The Royal Bank of Scotland, Raiffeisen Zentralbank Osterreich AG, Standard Chartered Bank, UniCredit Bank Austria, VTB Bank (Deutschland) AG and WestLB AG.

This benchmark transaction, one of the first syndications for a private Russian bank since the crisis began in the autumn of 2008, will contribute to the re-opening of the international debt market for Russian banks by strengthening investor confidence in reputable borrowers, Mr. Jorgensen added.

In 2009, the EBRD raised 468 million Euros (USD585 million at current exchange rates) in syndicated loans for 15 Russian projects, putting the Bank at the top of the league for syndications involving Russian borrowers, but the market in Russian syndicated loans itself last year fell 70 percent from the levels of 2008.

This loan, signed in London today, effectively revisits the success of the first syndicated loan arranged by the EBRD for Promsvyazbank in 2007, which raised USD300 million, including a USD215 million B portion syndicated to 33 commercial banks.

It complements an equity investment in Promsvyazbank, announced in November 2009 and completed last February, under which the EBRD acquired an 11.75 percent stake for 4.6 billion roubles (USD148 million at current exchange rates).

The stable funding provided by this new facility will, among other benefits, allow Promsvyazbank to expand its lending to the real sector at a critical time for Russia’s economy which is again showing encouraging signs of growth and increased demand.

Promsvyazbank is Russia’s second largest locally-owned private lender.