Khan Bank - parallel senior loan

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Translated version of this PSD: Mongolian The EBRD is considering a senior loan to Mongolia's Khan Bank as part of a senior/subordinated A/B syndicated facility being arranged by the Netherlands Development Company (FMO). The strong business expansion of the Mongolian economy and its corporate sector require an additional source of medium to longer term funding which will be provided by the proposed debt package. Transition impact of the project will arise from facilitating market expansion of the local corporate sector including in the regions by improving their access to longer term finance. The project will support Khan Bank's FX lending procedures for stress testing and disclosure of risks associated with such loans, thus demonstrating higher standards of business conduct to other banks. The structure used for this transaction - a parallel and syndicated A/B loan - is new to the banking sector in the country and it will provide a demonstration of new ways to finance activities in this sector. Khan Bank is the largest commercial bank in the Mongolian market by total assets and loan portfolio, representing market share of 24% and 27% respectively. The bank has the largest network of 499 branches and sub-branches and extensive reach into rural areas. It provides banking services to an estimated 80 per cent of Mongolian households. US$ 25 million senior facility. Up to US$ 125 million including senior and subordinated facilities. Categorised FI. Khan Bank is an existing Client of the Bank and has adopted an Environmental Policy and Environmental and Social Procedures, which largely satisfy requirements of PR 2 and 9. Required actions to achieve full compliance with the PRS have been communicated to the Client. Previously, Khan Bank benefited from technical assistance for MSME lending under Mongolia Multi-Bank Framework. The funding was provided by EBRD Early Transition Country Fund and EBRD Shareholder Special Fund. Also, the bank received technical assistance under the Medium-sized Co-Financing Facility (MCFF) which was established as part of a set of instruments to provide funding to medium-sized enterprises in selected countries of operation. The donor source was Early Transition Country Fund. No technical cooperation is envisioned for this project. Khan Bank LLC, Seoul Street-25, PO.BOX-192, Ulaanbaatar-44 Mongolia E-mail: info@khanbank.com Website: www.khanbank.com Tel: +976 11 332333 Fax: +976 70117023