Aizkraukles Banka receives a syndicated loan

June 29, 2006 / Banking

Today Aizkraukles Banka has signed its debut; EUR 50 million syndicated short-term loan facility. The volume of the transaction is the largest debut amount in Baltic countries for a bank without a foreign capital. The facility will be disposed for further enhancement of the general business of the bank. It will strengthen the position of Aizkraukles Banka in current circumstances of tough competition in the banking sector of Latvia.

In order to effectively achieve the planned target, Aizkraukles Banka appointed HSH Nordbank (Germany) and Raiffeisen Zentralbank Österreich (Austria) as Mandated Lead Arrangers. In cooperation with these banks there is a potential to address broader scope of potential lenders: banks from Europe, Asia and even Far East. One of the goals of this particular transaction is to attract the interest of potential business partners to a successful bank in Latvia with a purpose to promote further expansion of mutual relationship with Aizkraukles Banka.

Well applied strategy resulted into significant oversubscription. Aizkraukles Banka has made a decision to accept the increase — EUR 50 million with a 95 bp margin over Euribor. The initial amount was mEUR 25. The granted debt is a one year facility with a repeating option to prolong the loan for next period of 364 days. The facility provided to Aizkraukles Banka is unsecured.

19 banks from 10 countries across the world confirmed their participation in the first syndicated loan to Aizkraukles Banka. Apart from the mandated lead arrangers HSH Nordbank and Raiffeisen Zentralbank Österreich (RZB), the following foreign banks participated: Hypo Alpe-Adria Bank International; LRP Landesbank Rheinland-Pfalz — Member of the LBBW Group; AKA Ausfuhrkredit-Gesellschaft; Bankgesellschaft Berlin; State Bank of India; Banif Banco Internacional do Funchal; Landsbanki Luxembourg; Oberbank; American Express Bank; Bank Sepah International; BRE Bank; Caixa Geral de Depósitos; Landesbank Saar; National Bank of Egypt (UK); WGZ-Bank — Westdeutsche Genossenschafts-Zentralbank, as well as two local banks: Trasta Komercbanka and Mortgage & Land Bank of Latvia.

Chairman of Board and one of the major shareholders of Aizkraukles Banka — Mr. Ernests Bernis said: «We are truly delighted about the huge interest towards the opportunity to provide the facility to Aizkraukles Banka. It is considered to be undisputable proof of confidence from banks all over the world towards credit strength and potential of Aizkraukles Banka. The syndication is a good opportunity for the bank to promote itself as a trustworthy and stable partner for player in global capital markets. The facility will sustain the development of Aizkraukles Banka and improve the ability to strengthen its role between the largest banks in Latvia.»

Marc Dalgas, Syndicated Facility Department Manager of HSH Nordbank, and Florian Hehenfelder, Syndicated Facility Sales Specialist of RZB, confirmed great interest shown in potential lending to Aizkraukles Banka by the market, hence the initial amount was exceeded considerably. This is the largest loan in the Baltics raised by a bank without foreign capital for the first time. Taking account of the vast geography of lenders, owing to this transaction Aizkraukles Banka has a good chance to develop everyday potential co-operation with such banks.

Aizkraukles Banka is a 100% locally owned bank (major shareholders: Mr. Olegs Fils and Mr. Ernests Bernis). The bank provides a wide variety of services both in local as well as in international markets. At the end on 1st quarter 2006 Aizkraukles Banka was the 7th largest bank amongst 23 commercial banks of Latvia in terms of total assets.