Emirates NBD Bank
Published: 18/10/2011 by Marwan Al-Ahmadi - مروان الأحمدي
Emirates NBD Bank recently announced that they closed a deal on syndicated term loan facility worth $110 million. This deal was signed for OJSC Bank Uralsib. The bank was not alone in the deal, as they were assisted by big players namely the Standard Chartered Bank and the Wells Fargo Bank. The three financial institutions together formed a consortium called the Initial Mandated Lead Arrangers and Bookrunners. Indeed they are the lead arrangers for this deal, and it is a signup that assures positive growth for the company over the next year.
What’s interesting about this closure is that it was launched at a comparatively lower price of $100 million. It was eventually oversubscribed by about $10m and ended up at its final price of $110m. The margins on this deal are respectable at 2.00% per annum. Since the proceeds of this deal will go towards trade finance transactions by Uralsib, investments that are more likely to give better returns.
The deal is a very credible one because Uralsib is one of the largest banks in Russia and has more than 400 branches all over the country. The bank’s history also lends credibility to the deal. Their credit history has shown to be clean since the time it was started in 1997. Growth prospects for Uralsib are high, since they cover the fast growing medium sized business domain for the most part. Their client base is also fairly diverse,so the investment risks with them are fairly low.
If you need more evidence of positive signs around this deal by Emirates NBD, Uralsib is rated B+ by Standard and Poor’s. It means that the outlook is positively stable. Fitch also recently upgraded its ratings for the bank to BB- from B+, which again shows a stable outlook. Moody’s rates the bank at Ba3. The overall feeling around this deal is quite comforting for the investors.