MDM Bank and IFC Announce USD 535 mln A/B Syndicated Loan

18.07.2008 17:43

MDM Bank is pleased to announce that today the Bank signed a USD 535 million syndicated term loan facility, split between IFC A and IFC B Loans.

The IFC A-Loan is a 4-year term facility with a one-year grace period for USD 35 mln.  These funds will be used to support MDM Energy, the Bank’s energy-efficiency lending program for small businesses. The A-Loan facility is provided directly by IFC.

The IFC B-Loan is for USD 500 mln and is a one-year term loan with bullet repayment.  Funds from this loan will be used to support trade-related financing or other trade-related projects of the Bank’s clients. The IFC B-Loan was syndicated to commercial banks.

The A-Loan:

• MDM and IFC launched the MDM Energy program in November 2007, and a total of 19 deals totaling USD 9 mln have been financed or approved to date;
• The projects already financed are expected to save 50,417 MW/year and reduce CO2 emissions by 11,416 tons/year;
• The new USD 35 mln loan facility will enable the expansion of the MDM Energy program to meet growing demand for the product, with projects amounting to USD 20 mln already in the pipeline.

The B-Loan:

• The B-Loan was launched at the initial amount of USD 500 million and was closed at USD 590.5 million due to oversubscription. Subsequently, it was scaled down to the final amount of USD 500 million;
• A total of 27 banks from 18 countries joined the facility;
• The interest rate for this IFC B-Loan is 0.90% per annum over LIBOR;
• The USD 500 mln sum makes this the largest syndicated loan IFC has ever arranged in Russia

The initial mandated lead arrangers for the IFC B-Loan are IFC (International Finance Corporation), CALYON, Commerzbank Aktiengesellschaft, DZ BANK, Frankfurt am Main, Emirates NBD, Erste Bank der Oesterreichischen Sparkassen AG, ING Bank N.V., Intesa Sanpaolo SpA, Korea Development Bank, Raiffeisen Zentralbank Oesterreich AG, Sumitomo Mitsui Finance Dublin Limited, and Wachovia Bank. CALYON, Erste Bank, ING and RZB acted as joint bookrunners. Other banks joining the IFC B-Loan are: Alpha Bank A.E., The Governor and Company of the Bank of Ireland, Agricultural Bank of Greece SA, Banco Bradesco Luxembourg S.A., First Gulf Bank PJSC, Piraeus Bank S.A., WGZ BANK AG, Agricultural Bank of China, Banco Itaú BBA, Bank Leumi Le Israel B.M, BankMuscat S.A.O.G., BANQUE BIA, Pohjola Bank plc, State Bank of India, Zúrcher Kantonalbank and Citibank N.A.

Commenting on the new loan facility, MDM Bank CEO Michel Perhirin said: “This deal marks two important achievements for MDM: First, the success of the energy-efficiency product line introduced about a year ago.  The USD 35 mln A-Loan facility will enable us to build upon this success and to expand our energy efficiency lending program.  MDM Energy is important both for continued successful expansion in the small business sector, but also as part of our desire to expand MDM Bank’s sustainable business practices.  Second, the USD 500 mln B-Loan represents a serious vote of confidence in MDM Bank – it is the largest ever by IFC in Russia, and is the largest deal by a private Russian-owned bank since August of 2007.  We are extremely pleased with the level of interest from investors, and look forward to putting this funding to work for our clients in the nearest future.”

Jyrki Koskelo, IFC Vice President for Europe, Central Asia, and Global Financial Markets, said, “IFC provides Russian banks with longer-term credit lines designated for on-lending to companies to help upgrade their old, energy-intensive equipment. We also provide advisory services to help banks and their clients maximize their investments in energy efficiency. These investments have a very high economic rate of return for Russia as they offer the least expensive method to both improve competitiveness of industries as well as increased production / exports due to saved energy.

MDM Bank is one of our main partners in Russia. It began rolling out its energy efficiency finance product across the country last year, and we are pleased to strengthen our cooperation by supporting its activities in sustainable energy.”

About IFC

IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC's vision is that people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit www.ifc.org.

IFC in Russia

Russia became a member and a shareholder of IFC in 1993.  Since then IFC has invested over $3.6 billion in the country, including $527 million in syndicated loans, in over 150 projects across a variety of sectors.  IFC’s investment portfolio in Russia currently stands at $2.24 billion, making it the largest country exposure for IFC globally.  IFC has invested in key sectors including banking, leasing, housing finance, infrastructure, mining, agribusiness, pulp and paper, construction materials, oil and gas, telecommunications, information technologies, retail, and health care.  For more information, visit www.ifc.org/europe.

MDM Bank

MDM Bank was founded in December 1993 and holds a General Banking License issued by the Central Bank of Russia (#2361 dated 31 March 2008). MDM Bank is one of the most dynamically developing banks in Russia and is among the top Russian banks in terms of assets and equity. Today, MDM Bank is a modern universal financial institution offering a full range of services to its clients.

MDM has one of the highest credit ratings among privately-owned Russian banks – Standard & Poor’s (BB, stable), Fitch Ratings (BB, stable) and Moody’s (Ba1, stable) – and is the only Russian financial organization that has been given a public Corporate Governance Score by Standard & Poor’s (CGS-6+).

Standard & Poor’s awarded MDM Bank the highest ranking in its study of “Transparency and Disclosure by Russian banks” in 2006 and 2007. The Bank was also regarded by Euromoney magazine as “one of the leading banks in Russia and Emerging Europe, applying the most advanced standards of corporate governance.”

MDM Bank has received a number of awards from Global Finance magazine:
2005 – Best Domestic Bank and Editor’s Special Award for Transparency.
2006 – Best Forex Bank, Best Domestic Bank, Best Domestic M&A Arranger, and Best Bank in Corporate Governance. In October 2006, Euromoney magazine awarded MDM Bank Leading Bank in Corporate Governance in Emerging Europe.
2007 – Corporate Governance Editor’s Award, and Best Forex Bank.
2008 – Best Domestic Bond Research Team

Inquiries
Investor Relations                                                                                                    Public Relations
+7 495 221 30 75                                                                      +7 495 363 27 41
www.mdmbank.com

21.08.2008 22:34

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