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Publish Date : 02-Jun-2014

Syndication of USD 700 million, 5 year loan for Russian steel company Evraz, which is the first loan to launch since economic sanctions were imposed on Russia is launched by ING and Deutsche Bank.

Bankers said that the syndicated loan market has been effectively closed since sanctions were imposed in April and banks have been reducing their exposure by selling Russian loans in the secondary loan market.

Some lenders said that this process will be difficult to reverse and the Russian loan market could be closed for up to a year. Invitations for the pre export deal were sent to about seven banks this week.

Bankers close to the deal are expecting that more positive sentiment toward Russia since the election of new Ukrainian President Mr Petro Poroshenko previous weekend will calm lenders' fears about Russian risk.

A London based banker said that after the elections I think banks will be more relaxed around Russian exposure, the political situation seems more stable. Although Evraz is regarded as a more international company with assets and manufacturing facilities globally and a number of offshore accounts, the outcome of the loan remains uncertain.

Bankers said that none of the invited banks have got approval from their credit committees to join the deal yet. Lenders will want time to assess the situation, many have made the radical decision to step away from Russia and that decision is not going to be reversed easily. I cannot see any deals getting done soon.

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