Latvijas Unibanka (syn loan)

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Syndicated loan facility of up to EUR 45 million under a standard A/B loan structure. The A loan for the EBRD’s own account is up to EUR 15 million for a term of five years and the B loan for participant banks is up to EUR 30 million for three to five years. The proceeds of the loan will be used by LUB to extend its private sector lending activities. The transition impact of this project would be twofold. The provision of a syndicated loan to a leading financial institution in Latvia would offer a strong demonstration effect to international investors who are currently reluctant to consider financing in the EBRD’s countries of operations following the 1998 Russian crisis. Secondly, as the second largest bank in Latvia, LUB’s financial position and its ability to retain the confidence of the population are important to the health of both the Latvian banking and private enterprise sectors. The syndicated loan, therefore, will strengthen one of the key players in the Baltic economy, and will support LUB in meeting the demand by private sector enterprises for medium-term financing. A/S Latvijas Unibanka (LUB) is one of the two largest banks in Latvia. LUB is majority owned by Skandinaviska Enskilda Banken AB (SEB). LUB will use the proceeds of the loan to expand its private sector loan portfolio. Syndicated loan of up to EUR 45 million under an A/B loan structure. The EBRD will take up to EUR 15 million of direct exposure, and the balance will be syndicated among participating banks. Bankgesellschaft Berlin (BGB) has underwritten EUR 20 million of the B loan. The loan will be disbursed in two tranches. The first tranche will comprise 50-75 per cent of the total loan amount. The second tranche will be disbursed after 80 per cent of the first tranche has been used by LUB. Up to EUR 45 million, a third of it to be financed by the EBRD. LUB will carry out its operations in accordance with the EBRD's Environmental Procedures. These provide for the integration of environmental due diligence into LUB's credit appraisal processes and a requirement that ultimate borrowers comply, at a minimum, with national and local health and safety and environmental regulations and standards and public consultation requirements. LUB will submit annual environmental reports to the EBRD. None.