Analysts say MDM Bank may count on the rates of the EBRD loan that won’t exceed the ones applied to syndicated loans raised by big banks.
Photo: Pavel Smertin
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EBRD Pays Attention to Big Players
European Bank for Reconstruction and Development (EBRD) announced Monday it grants the $225-million loan facility to MDM Bank. It is the first time that EBRD, which is focused on the small/mid-business advance, lends money to a big bank of Russia. This move of EBRD, market players speculate, could be interpreted as the start of a new strategy targeted at boosting investments in the bank business of Russia.
EBRD’s Credit Committee OKed granting the $225 million to MDM Bank past week, but the final decision will be taken by the board of directors in a month, EBRD spokesman Richard Wallis said.
MDM Bank will funnel money into the programs of small/mid-business crediting, vowed Andrey Ilyin, financial director at MDM Bank. “For any bank of Russia, the EBRD credit means a definite sign of quality, which enables to attract other investors,” Ilyin specified.
The loan parameters are yet unclear. But the analysts are sure the rates won’t exceed the ones applied to syndicated loans raised by big banks - LIBOR plus 1 percent to 2 percent. When it comes to small/mid-business, the rates amount to 14 percent to 25 percent in rubles, Ilyin specified. The EBRD funds will help the bank step up this sector’s portfolio to $1 billion by 2010.
So far, no tight contacts of EBRD with Russia's bank blockbusters have been ever spotted. But its strategy of cooperating with Russia that was elaborated for 2007 to 2008 and promulgated in August spells out material increase in financing the projects here. Moreover, top managers of EBRD said the bank is willing to invest $150 million in capital of Russia’s banks.
Granting a loan is not buying a stake in the stock capital of course, but it signals a new trend has emerged. According to Trust Investment Bank analyst Mikhail Galkin, EBRD starts attracting big banks to cope with increased budget allocated for Russia, but the strategic purpose of helping small/mid-business has remained unchanged.
www.kommersant.com
All the Article in Russian as of Aug. 22, 2006
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