Narrative
Full Description
Project narrative
On March 3, 2011, VTB — a Russian state-owned bank — signed a $3.13 billion (RUB 87.3 billion) syndicated (unsecured) loan agreement for debt refinancing and general corporate purposes. Participants in the loan syndicate included BNP Paribas, Barclays, Bank of America Merrill Lynch, BTMU, China Development Bank (CDB), Citi, Commerzbank, Crédit Agricole, Credit Suisse, Deutsche Bank, Goldman Sachs, ING, JP Morgan, Mizuho, Morgan Stanley, Royal Bank of Scotland, Société Générale, Sumitomo Mitsui Banking Corporation (SMBC), Wells Fargo. CDB’s estimated contribution to the loan syndicate is captured via Record ID#66823. The loan carried a 3-year maturity and an interest rate of LIBOR plus a 1.3% margin. The book runners and lead arrangers for the loan included Bank of America, Barclays, and Morgan Stanley. ING and SMBC co-ordinated the deal. BNP Paribas, Barclays, Bank of America Merrill Lynch, BTMU, China Development Bank, Citi, Commerzbank, Crédit Agricole, Credit Suisse, Deutsche Bank, Goldman Sachs, ING, JP Morgan, Mizuho, Morgan Stanley, Royal Bank of Scotland, Société Générale, SMBC and Wells Fargo were mandated lead arrangers. The loan was disbursed in July 2011. At the end of 2011, VTB bought back RUB 6.3 billion from the syndicated loan participations, which resulted in the recognition of a gain on the extinguishment of debt of RUB 0.4 billion for the period. This effectively reduced the debt obligation by RUB 6.3 billion. The loan was repaid in full on July 14, 2014.
Staff comments
1. The exact size of CDB’s contribution is unknown. For the time being, AidData assumes that all 19 members of the lending syndicate contributed equally ($164,736,842) to the $3.13 billion loan. 2. AidData has estimated the all-in interest rate by adding 1.3% to average 6-month LIBOR in March 2011 (0.461%). 3. Some sources suggest that the proceeds of the loan were to be used by VTB to acquire an ownership stake in Bank of Moscow. 4. VTB Bank is a Russian majority state-owned bank headquartered in various federal districts of Russia; its legal address is registered in St. Petersburg; as of 2022 company's capital stock was mostly owned by three Russian agencies. 5. VTB exercised a "buy-back" from the syndicated banks. Buy-back, while results in the reduction of debt as well, is not the same as advance repayment. Buy-back of part of loan proceeds may the price paid by VTB to repurchase this debt was lower than the debt’s carrying value on VTB’s books, VTB records the difference as a “gain", because they effectively saved money by paying less to retire this portion of the debt than what it was originally worth on their balance sheet.