No less than 27 banks have entered the syndicate that raised 250 million dollars to finance current operations of Raiffeisen Bank Romania.
The loan matures in three years, and the cost is 1.20 percentage points above LIBOR rate, the benchmark interest on the London inter-banking market. In line with the contract, the credit will be fully reimbursed at the maturing term. This is the largest syndicated loan contracted by a Romanian bank, after BCR attracted 200 million dollars early this year, maturing in five years and at a margin of two percentage points above LIBOR.
As in the case of BCR, the request for financing initially launched by Raiffeisen Bank, of 100 million dollars, has been powerfully oversubscribed, to 300 million dollars, of which the bank has finally accepted 250 million dollars, for this year's expansion.
The deal was handled by four investment banks: Bank Austria Creditanstalt, DZ Bank, JP Morgan and Mizuho Corporate Bank.
The syndicated loan is part of an entire package of financing sources Raiffeisen Bank has resorted to this year: two capital raises worth more than 86 million euros, fully born by the parent company, a bond issue on the domestic market, worth about 34 million euros at the launch date, plus a financing line standing at 10 million euros from EBRD. Thus, the value of funds attracted by the bank to support its expansion process is in excess of 316 million euros. The money from the syndicated loan is mainly destined to back up the rapid growth of the bank's credit portfolio.
"Our target for next year is to outpace the banking system growth, namely to further expand our market share," stated Steven van Groningen, president of Raiffeisen Bank.
He says that the market share target stands at 15%. "The target is not easy to reach because, beside expansion, we have to consider profitability, too," says the head of Raiffeisen Bank.
Raiffeisen is the third-largest Romanian bank in terms of total assets, which exceeded 1.4 billion euros in late June 2004, and has more than 1.5 million customers.
Another Romanian bank that is likely to get financing is Banca Tiriac. The bank may receive funds worth $27.5 million from IFC, with 7.5 million dollars to account for a subordinated loan, convertible into equity. IFC considers it will thus play a strategic role in the increase of the bank's value ahead of a possible sale to a strategic investor. With the IFC financing, Banca Tiriac would better meet the medium-term financing needs of SMEs, but also large corporations.
razvan.voican@zf.ro
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