Tuesday, 27 may 2008

BALC wins “Euromoney’s Best Deal of the Year 2007” award

BUSINESS ALLIANCE has won “Euromoney’s Best Deal of the Year 2007” award for the issuance of securitized Eurobonds.

For the implementation of a number of lease agreements signed between BUSINESS ALLIANCE and “Moscow Unified Electricity Distribution Network” (MOESK) in 2006 and totaling about RUB 12 billion, BALC obtained a loan from the Bank of Moscow and simultaneously organized the issuance of securitized Eurobonds (ABS) in order to refinance the obtained credit.

BUSINESS ALLIANCE originated the placement and Bank of Moscow organized it.

The underlying asset of the Eurobonds is the lease payments from MOESK to BALC, which may be redirected to the creditors in order to secure the leasing company’s liabilities, which in turn are based on a combination of the Russian and the English law.

Since the transaction was the first of its kind, investor education was held from April 2007. As a result of significant demand on the part of investors, the coupon rate was reduced from 9% to 8.875% with a credit note circulation period of 5 years.

It was the first time that Eurobonds were used, not for the purposes of a specific placement, but to finance a leasing company that was carrying out a transaction and really working on the market. As a result, the position of the leasing company is better secured in terms of VAT.