Emirates NBD leads $220m loan facility
The loan was required because of the effect on the Russian bank of the slowdown in the global economy, the credit crunch and the decline of the dollar, said its Executive Vice-President Pavel Gorbatsevich.
Emirates NBD, ABN Amro, Deutsche Bank and Raiffeisen Zentralbank Österreich (RZB) are the lead arrangers and bookrunners and have each offered $25m. The balance is being provided by 14 other global banks and financial institutions.
The 18-month facility pays a margin of 0.65 per cent over the benchmark Libor rate. Bank of Moscow will use the loan to meet its trade finance and general corporate funding requirements.
Abdul Wahed Al Fahim, General Manager of Wholesale Banking at Emirates NBD, said the syndicated loan was launched at an amount of $150m and was oversubscribed by 47 per cent, closing at $220m.
Zaid Maleh, Head of Origination and Structuring at RZB, said the high over-subscription reflected a new trend of co-operation between the Middle East and East Europe.
"We see high liquidity in the region, especially in the Gulf Co-operation Council countries, while East Europe needs this liquidity. Russia is showing high growth rates and this has created trust in its economy. Twelve out of the 18 banks that participated in the loan are totally new financial institutions."
Al Fahim added: "Middle East banks represent 30 per cent of the loan, European banks 65 per cent and Asian banks five per cent."
He said the small 0.65 per cent margin over Libor reflected the low risk associated with Bank of Moscow and also the short loan period.
"We expect more developments in international credit markets and this will lead to a further decline in risk pricing by the end of the year," said Al Fahim. "Emirates NBD was the leader of the funding banks. This is the largest syndicated loan in the UAE for a financial institution so far this year."