Page 115 - IFR Opportunities in Russian capital markets

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ifrintelligence reports/Opportunities in: Russian Capital Markets
loan taken out in 2006 at an interest rate of 180bp above Libor, and a US$800m loan taken out in December 2004 at 200bp above Libor. In late 2004, Rosneft had raised record loans to finance its US$9.35bn purchase of Yuganskneftegaz, a former subsidiary of oil company Yukos.
At least two banks pulled out of the syndication rather than agree to the new terms, although the rest reportedly made the concessions demanded and indeed the same group of banks ended up organising the Rosneft IPO.
There are several more IPOs still in the works, such as VTB’s IPO slated for the second half of 2007 and Gazprombank is due to IPO in the first half of 2008.
This linking of investment bank work with the raising of syndicated loans has dramatically affected both the rates and the make-up of syndicates for the state banks. Typically, the state banks command rates of about 150bp less than purely commercial borrowers and the syndicates willing to make these loans have fallen from over 50 participating banks to a dozen or so big names.
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