By Andrei Skvarsky.
A large group of banks and companies including Sberbank, Deutsche Bank, PricewaterhouseCoopers and Baker & McKenzie have drafted uniform rules on syndicated lending based on Russian law in a bid to do away with legal discrepancies in the current Russian syndicated lending practice.
A standard set of documents was drawn up that is to be used in any syndicated loan deal – a facility agreement, a fee agreement, guidelines for calculating financial indicators and an accounting procedure, according to a statement from Sberbank CIB, the investment arm of Russia’s biggest lender Sberbank.
They project, whose results were announced last week, brought together nine banks.
They were Sberbank CIB, Deutsche Bank, UniCredit, Raiffeisenbank, BNP Paribas, VTB, Gazprombank, Promsvyazbank and the European Bank for Reconstruction and Development.
The other companies involved were PricewaterhouseCoopers, Ernst & Young, Baker & McKenzie, Allen & Overy, Clifford Chance, DLA Piper, Freshfields Bruckhaus Deringer, Goltsblat BLP, Linklaters CIS, Orrick, and White & Case.
Besides solving legal problems, the new rules are expected to stimulate the overall growth of the primary and secondary syndicated lending market.
“Of course the Russian syndication market is not new, but it has lagged far behind the market for deals using the Loan Market Association’s standard documentation, which for several decades has involved an English law standard agreement,” the Sberbank CIb statement quoted Yury Korsun, head of Sberbank CIB’s syndicated loans division and chairman of the Syndicated Lending Coordination Committee of Russia’s Association of Regional Banks, as saying.
“Until now the market for Russian law syndicated lending has used different documents and approaches to address issues related to the specifics of Russian legislation. We hope that the standard documentation will not only unify the approaches of different banks, but also increase demand for syndicated lending as a banking product that resolves the multiple tasks set by borrowers.”