Thus, during the meeting, Russian colleagues with VEB.RF shared their experience in organizing syndicated transactions, the specifics of project financing factory, and talked about the syndicated lending market in Russia.
Syndicated financing is project lending, which is carried out through the participation of several lenders (at least 2) with the determination of the amount of participation of each lender, separate obligations of lenders, decision-making by the majority or all lenders. Within the framework of the syndicated loan, a Loan Manager is appointed (responsible for redistributing payments, exchanging documents and information, maintaining a register of creditors, organizing voting by creditors) and Pledge manager (dealing with collateral registration, interacting with public registers and, if necessary, levying foreclosure in favor of creditors). In this case, the same bank can act as the Credit Manager and the Pledge manager.
The legal structure of the syndicated financing transaction includes the conclusion of the Syndicated Loan Agreement and, within the framework of it, the Agency Agreement and the Collateral Management Agreement.
The volume of annual transactions through the syndicated lending mechanism is estimated at $ 4.8 trillion. In the world, the volume of syndicated loans exceeds the volume of Eurobonds, this trend is due to the developed legal regulation, the availability of appropriate instruments.
VEB.RF together with Russian banks Subsidiary JSC VTB Bank, Gazprombank, PJSC Bank FC Otkritie, SberBank in the period from 2019 to 2020 signed 11 syndicated project finance deals with a total transaction volume of USD 21 billion (including the Amur GPP - USD 13 billion). The average time for approval and conclusion of such transactions is 9 months.
In addition, during the conference, the criteria for possible co-financing of Kazakhstani projects between DBK and VEB.RF were condemned.
The Development Bank of Kazakhstan plans to develop similar syndicates in project financing. In the pipeline of DBK for syndicated lending there are 4 projects with a total amount of applications for the amount of about 380 billion tenge. At the moment, work is underway on structuring through such mechanism as a project for the construction of a gas processing plant at the Kashagan field.
In this regard, Development Bank of Kazakhstan offers financial institutions (second-tier banks and foreign banks) active cooperation in the development of syndicated lending in Kazakhstan, since this instrument brings benefits not only for borrowers, but also for second-tier banks: risk distribution between syndicate participants, increase and diversification of the loan portfolio.
To discuss cooperation issues, you can contact us:
Director of the Project Finance Department Tazhikenov Aset, 27 04 16, e-mail A.tazhikenov@baiterek.kz
Senior banker Akhmetov Serik, tel. 79 26 18, e-mail serika@kdb.kz
Note that DBK already has the necessary experience in working with syndicates, so in 2017 DBK was awarded for the best deal to attract a syndicated loan at the international conference TXF Global Export Finance. DBK entered into a Loan Agreement with a syndicate of banks consisting of Sumitomo Mitsui Banking Corporation Europe Limited, Bank of Tokyo-Mitsubishi UFJ Ltd., Deutsche Bank Hong Kong Branch, Credit Agricole Corporate and Investment Bank, under Sinosure insurance coverage to finance the investment project “Reconstruction and modernization of the Shymkent refinery ".
