Moscow, 30 September 2011. The Eurasian Development Bank (EDB) can provide new debt financing opportunities for large-sized businesses. Vladimir Alenichev, Head of the EDB Corporate Finance, said this in Moscow, at the international conference on corporate development strategies in Russia and the CIS “M&A in Russia & CIS: How to Create Synergy from Deals.” The conference has been organised by C5, a known UK company specialising in holding business forums all over the world.
Talking about improving Russian companies’ access to foreign finance, Mr Alenichev said that an efficient solution to this was to issue and place bonds with the principal and/or coupons guaranteed by the EDB.
Mr Alenichev believes that guaranteed bonds meet the interests of all the parties involved.
For issuers, they are an alternative to raising loans and placement of equity securities. They also help reduce the cost of funding ( in particular as regards coupons paid to investors), extend loan periods, diversify the sources of finance with an extended institutional investor base, and form a quality pool of investors.
For investors, guaranteed bonds allow accepting, in full or in part, the EDB’s end risks, with a premium on its secondary yield curve, and reducing issuers’ credit and sovereign risks.
For the EDB, they are an additional off-balance-sheet credit tool to attract private investment in companies whose operations meet the Bank’s economic priorities. Many international banks, in particular the International Finance Corporation, guarantee corporate bonds.
Mr Alenichev also presented to the conference participants from Russia and CIS’ largest companies the range of financial instruments offered by the EDB. These include long-term project finance, short-term pre-export and trade finance, and corporate development loans. He also emphasised that the EDB’s priority is interstate projects that develop cooperation between countries and enhance mutual investment and mutual trade.
