Banks ink Hermes-covered Tobolsk-Polymer tranche

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26 February 2010

Banks have signed the Euler Hermes-backed tranche of a jumbo project financing to build a 500 tonne polypropylene production complex in Russia.

Banks have signed a $533.8 million tranche, backed by Euler Hermes, of a much wider $1.49 billion financing package to Russian state bank Vnesheconombank (VEB) to help build a 500 tonnes polypropylene production complex in Russia.

VEB will onlend the Hermes financing to Tobolsk-Polymer, a special purpose vehicle created by Sibur Holding, to support the construction of a polypropylene production complex in the Russian town of Tobolsk, in the Tyumen region.

The Euler Hermes tranche will be used...

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Poll

Will Russia’s recent ban on grain exports result in a significant rise in private risk insurance claims from grain traders unable to fulfil their contracts?

Yes – there will be more claims. The government’s actions allow traders, with PRI cover, to make claims through contract frustration.

No - the majority of Russia’s wheat production, some 70%-80%, is used for domestic consumption so the contracts represent only a small portion of the total wheat market, limiting the amount of potential claims.

23%

No - traders had a week’s notice before the ban allowing them to secure alternative supplies to fulfil contracts stated as optional origin.

23%

Maybe - but claims are likely to be limited to traders dealing in soft wheat whose contracts demand they source wheat only from Russia.

46%