MICROCAPITAL BRIEF: International Finance Corporation (IFC) and European Bank for Reconstruction and Development (EBRD) Syndicate $164m Debt Financing Package for Russia’s Transcapitalbank

The International Finance Corporation (IFC), a member of the World Bank Group, and the European Bank for Reconstruction and Development (EBRD), a London-based financial services institution, have jointly raised USD 164 million of debt financing for Transcapitalbank, a Russian bank which primarily supports small and medium-sized enterprises and has total assets of RUB 58 billion (USD 1.9 billion) at December 31, 2009.

The IFC and EBRD each provided three-year A loans of USD 30 million while an additional USD 104 million B loans was syndicated to a consortium of the following twelve commercial banks: Commerzbank AG, FBN Bank (UK) Ltd, ING Bank NV, Raiffeisen Zentralbank Österreich AG (RZB), Standard Chartered Bank, VTB Bank (Deutschland) AG, Amsterdam Trade Bank NV, AKA Ausfuhrkredit-Gesellschaft mbH, Banque de Commerce et de Placements SA, London Forfaiting Company Ltd, Royal Bank of Scotland NV and ADRIA Bank AG. The EBRD and IFC are the lenders of record for the total loan amount of USD 164 million.

The loans aim to re-invigorate the international debt market for Russian banks subsequent to the global financial crisis. The loan syndication is the first for Transcapitalbank since the financial crisis and the financing will support the bank’s core lending activities.

By Jennifer Shevock, Research Associate

About International Finance Corporation:
A member of the World Bank Group, the International Finance Corporation (IFC) uses loan and debt securities, equity investments and guarantees with the intent of alleviating poverty. It invests in financial institutions and other companies in emerging markets as well as providing technical assistance. The IFC has 182 member countries that collectively determine its policies and approve investments. In fiscal year 2009, its new investments totaled USD 14.5 billion.

About the World Bank Group:
The World Bank Group consists of five associated institutions, all owned by member countries that carry ultimate decision-making power. The group’s mission is to fight poverty and improve living standards for people in the developing world. The World Bank Group includes the World Bank, which consists of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID). Established in 1944, the World Bank’s two development institutions, IBRD and IDA, provide leveraged loans to developing countries for capital programs.

About the European Bank for Reconstruction and Development:
The European Bank for Reconstruction and Development (EBRD) is an international finance institution headquartered in London. The bank began operations in 1991 upon the agreement of 40 countries and is now owned by 61 countries as well as the European Investment Bank and the European Union. It aims to finance operations that are commercially viable and assist development in 29 countries in Eastern Europe and Central Asia. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro and small businesses as well as commercial banks and non-bank microfinance institutions (MFIs). As of the end of 2008, EBRD has operating assets worth EUR 5.2 billion, the equivalent of USD 7 billion.

About Transcapitalbank:
Transcapitalbank is a banking institution in Russia whose primary operations are focused on corporate banking, loan financing and active support of small and medium sized businesses in all sectors of the economy. Currently, Transcapitalbank’s network consists of 71 outlets located in 17 regions. Total assets are RUB 58 billion (USD 1.9 billion) at December 31, 2009.

Sources and Additional Resources:
“EBRD and IFC raise $164 million for Russian private bank” July 15, 2010.
http://www.ebrd.com/pages/news/press/2010/100715.shtml

MicroCapital Universe: International Finance Corporation: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+(IFC)

MicroCapital Universe: World Bank Group: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=The+World+Bank+Group

MicroCapital Universe: European Bank for Reconstruction and Development: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29

MicroCapital Universe: Transcapitalbank: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Transcapitalbank

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