Published: October 16, 2013
Russian bank’s deal was its easiest yet, CEO tells EMEA Finance.
Promsvyazbank (PSB), Russia’s 11th largest bank by assets, has today agreed a US$300mn syndicated loan.
The loan, priced at 175 basis points above LIBOR, was provided by 22 banks including Deutsche Bank, Goldman Sachs, HSBC and Wells Fargo.
According to CEO Artem Konstandyan, the bank could have raised more had the management team so desired.
“We easily could have raised half a billion, though there was serious debate if we should raise the syndicated loan at all,” he told EMEA Finance. “The reason is that syndicated loans used to be our cheapest short-term liability, but that’s no longer the case. We can raise the same amount, same tenors, on the Russian corporate [bond] market even cheaper. As a compromise we decided to raise the facility but cap it at US$300mn.”
Despite this loan being the bank’s “easiest one yet”, with the most favourable terms, Konstandyan says PSB has no plans to return to the market in the near future. There is likely to be some activity in the second half of 2014, he adds, possibly on the subordinated side.
“It is an open question whether it will be senior debt or subordinated debt,” he says. “Looking at the current sub-debt placements, they do not seem very encouraging. The prices [other] people are willing to pay, we are definitely not... I can imagine we will issue sub-debt at some time next year. If not, I can’t imagine we will leave a whole year without senior debt being issued.”