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Russia: from hot risks to hot prospects
01 January 2005
For those financiers willing and able to look beyond the more familiar corporate names, the Russian corporate sector of productive entities has a particularly rich vein of potential prospects. Banks are casting away the notion of the 'second-tier', and looking to a new breed of borrowers.
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commodity
finance
russia
export
Russian industry proper is opening to pre-export and ECA-backed finance. Banks are doing hundreds of millions of dollars' worth of business in the country's dynamic manufacturing and processing sectors, including fertilizers, petrochemicals, forestry and wood products, and steel and steel products.
The financing frontier is being pushed out beyond the big exporters of oil, gas and non-ferrous metals partly because the big syndications on which the market gorged itself in 2002-03 are not available. Western banks' boards feel disinclined to sanction major financings for privately-owned natural resources companies until the medium-term implications of the government's destruction of Yukos oil company become clearer. And anyway, participation in syndicated oil deals hardly makes money any more: interest rates are wafer-thin, not only loans for the state-controlled or politically 'safer' companies but also on the scaled-down deals carrying 'oligarch risk'. A classic example of the latter is Sibneft's 25-month $160 million loan, announced...
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