RLPC-Russia's VTB in talks over bilateral loans

LONDON Thu Aug 14, 2014 12:39pm EDT

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LONDON Aug 14 (Reuters) - Russian state-owned bank VTB is asking several European banks that committed to a $1.5 billion loan which was cancelled after the bank appeared on a US sanctions list if they will lend to it on a bilateral basis, banking sources said.

EU and further US sanctions in mid July ended VTB's plans to raise an international syndicated loan. Banks had already committed to the one-year loan, which was being arranged by Barclays, and was about to be signed when VTB was included in US sanctions.

The Russian bank is now quietly approaching banks that had joined the deal to see if they will lend on a bilateral basis.

"VTB is approaching all the European banks that had got credit approval for the deal to see if it can agree some bilaterals instead," a banker close to the deal said.

VTB declined to comment.

The $1.5 billion loan, which refinanced a $3.13 billion facility agreed in 2011 included commitments from US and Japanese banks and would have reopened the Russian loan market which had been effectively shut since Russia's annexation of the Crimea in March.

VTB is now looking at other ways of raising funds, but bankers are sceptical that any banks will agree to provide bilateral loans now that the bank is on the US sanctions list.

"I can't see a reason to do a bilateral with VTB unless we get something really good out of it," a second banker said.

On August 1, VTB issued a statement saying that it had repaid the $3.13 billion syndicated loan with its own funds on July 14, days before the new sanctions were issued. (Editing by Tessa Walsh)

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