LONDON, Aug 11 (Reuters) - Gazprombank has repaid a $1.2 billion term loan facility that it signed with a club of international banks in August 2011, the Russian bank said in a statement on Monday.
Gazprombank was trying to refinance the deal in the international syndicated loan market before EU sanctions were announced on July 29 and the US released more sanctioned names.
The Russian loan market was on hold before the sanctions were announced in late July and is still effectively closed, although some European banks with Russian franchises such as ING , UniCredit, Societe Generale and Raiffeisen Bank International, are exploring ways to lend to Russian companies that are not subject to sanctions.
The abrupt slowdown in Russia’s syndicated loan market has forced Russian banks to become more self-sufficient. Gazprombank’s loan repayment mirrors a similar repayment by Russia’s second-biggest bank, VTB, which was also seeking to refinance an international loan but repaid the deal in July, and an earlier repayment by state-owned bank VEB in April.
VEB cited weak investor appetite and unfavourable terms for a new loan when it cancelled plans to refinance a $2.45 billion bridge loan in April. VEB said that it would repay the loan with a view to returning to the loan market later in the year when the geopolitical situation might have changed.
Gazprombank originally approached banks in July to refinance the existing loan, which was co-ordinated by ING, with a one-year syndicated loan of up to $1 billion. Gazprombank’s new loan was expected to carry a margin of around 175 basis points over LIBOR, with terms similar to VTB, which was also looking for a similar one-year loan of $1.5-2 billion at the same time.
VTB’s loan was expected to refinance an existing three-year $3.13 billion loan, that was originally co-ordinated by ING and SMBC and was due to mature in July. VTB’s refinancing attracted support from international banks, including US lenders, and it was hoped that the deal would reopen the Russian loan market after banks closed shop on Russian lending after Russia’s annexation of the Crimea in March.
However on August 1, VTB issued a statement saying that it had repaid the syndicated loan with its own funds before the EU issued sanctions in late July and the US released more sanctioned names, including VTB. (Editing by Tessa Walsh)