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Representatives of Baiterek AND its subsidiaries, including the Development Bank of Kazakhstan, organized an online meeting with colleagues from the state development Corporation VEB.RF. During the meeting, the exchange of experience between financial institutions of Kazakhstan and Russia took place.
In particular, the Russian colleagues from the web.They shared their experience in organizing syndicated transactions, the specifics of the project Finance factory, and spoke about the syndicated lending market in Russia.
Syndicated financing is the lending of projects that is carried out through the participation of several creditors (at least two) with the determination of the amount of participation of each creditor, separate obligations of creditors, and decision-making by a majority or all creditors.
Under a syndicated loan, a Credit Manager is appointed (responsible for redistributing payments, exchanging documents and information, maintaining the register of creditors, organizing voting by creditors) and a collateral Manager (responsible for processing collateral, interacting with public registers, and, if necessary, foreclosing on creditors). In this case, the same Bank can act as a Credit Manager and a collateral Manager.
The legal structure of a syndicated financing transaction includes the conclusion of a syndicated loan Agreement and, within it, an Agency agreement and a 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 issued. this trend is due to the developed legal regulation and the availability of appropriate instruments.
VEB.The Russian Federation, together with Russian banks UP to VTB Bank JSC, Gazprombank, OTKRITIE FC Bank PJSC, and Sberbank signed 11 syndicated project financing transactions with a total transaction volume of US $ 21 billion (including the Amur GPP - us $ 13 billion) in the period from 2019 to 2020. The average approval and conclusion period for such transactions is 9 months.
In addition, the conference discussed the criteria for possible co-financing of Kazakhstan projects between DBK and VEB. RF.
The Development Bank of Kazakhstan plans to develop similar syndicates in project financing. The DBK pipeline for syndicated lending has 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 a mechanism as the project for the construction of a gas processing plant at the Kashagan field.
In this regard, the Development Bank of Kazakhstan offers financial institutions (second-tier banks and foreign banks) active cooperation in the development of syndicated lending in Kazakhstan, as this tool brings benefits not only for borrowers, but also for second-tier banks: risk distribution among syndicate participants, increase and diversification of the loan portfolio.
To discuss cooperation issues, please contact us at:
Asset Taghikenov
Director of the project Finance Department of JSC "NMH "Baiterek"
+7 (7172) 27-04-16, a.tazhikenov@baiterek.kz
Serik Akhmetov
Senior banker of Development Bank of Kazakhstan JSC
+7 (7172) 79-26-18, serika@kdb.kz
It should be noted that DBK already has the necessary experience in working with syndicates, so in 2017 DBK was awarded for the best syndicated loan deal 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 to Finance the investment project "Reconstruction and modernization of the Shymkent oil refinery".
