Ukreximbank syndicated loan

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Project Description This PSD relates to a historical Bank project approved some years ago, and does not represent a new approval, or allocation of new funds.  Disclosure of this PSD was deferred in accordance with the transparency framework in place at the time, but due to an administrative oversight, was not subsequently disclosed In May 2009, the Board of Directors approved a syndicated loan of up to USD 150 million to the State Export Import Bank of Ukraine (the Company), to support its ability to continue lending to the real economy. Project Objectives As the first syndicated loan to Ukraine following the 2008 financial crisis, the transaction was intended to send an important signal to the market regarding support of the Company’s refinancing needs. Transition Impact The transaction was to derive its transition impact by providing support to the Ukrainian banking sector and economy at large in a number of respects: (i) setting standards for business conduct to facilitate stabilisation and healthy market growth with high standards of corporate governance and robust lending procedures, (ii) providing support to Ukraine’s reputable financial institutions in order to maintain a functioning banking sector and improve market confidence, (iii) facilitate financial intermediation by continuing to lend to the real economy, and (iv) demonstrating replicable behaviour and activities to the broader market. Additionality The key aspect of the Bank’s additionality in relation to this transaction was its contribution to provision of additional funding on a commercial basis.  In the market conditions at the time, the Company was not able to attract funding from commercial sources. The Bank’s participation facilitated commercial mobilisation and provided funding otherwise impossible to secure in the circumstances. Environmental and Social Summary Determined to be a Category FI project, the Bank required that the Company continue to comply with the standards imposed by Performance Requirement 2 (Labour and Working Conditions) and Performance Requirement 9 (Financial Institutions) in relation to its full range of lending and investment activities.  To monitor compliance with these requirements, the Company was required to submit annual reporting to the EBRD regarding its management of environmental and social matters. Technical Cooperation None. Implementation Summary EBRD assisted the bank in raising USD 134.5 million syndicated loan in 2009. The deal was named the Best Syndicated Loan in CEE-CIS by Emeafinance magazine and was the first market transaction for a Ukrainian bank since the start of the crisis, sending an important positive signal to the market and supporting the Company’s refinancing needs in 2009.  Later in April 2010 the Company successfully issued USD 500 million 5-year Eurobonds rated B1 by Moody’s and B- by Fitch. EBRD’s syndicated facility was repaid in accordance with the schedule.