Banks shut revealing a deal on restructuring

The deal on debt restructuring of group of companies “Track” the total volume slightly less than RUB 20.1 bn was closed in late November, said Oleg Gordienko, head of the investment banking operations of the Raiffeisenbank, the organizer of the transaction. The main part of a loan restructured in a five-year syndicate of ten banks (Absolut Bank, AVB Bank, Bank BKF, the Bank “Zenith”, “Credit Express”, “FC Opening”, Promsvyazbank, Raiffeisenbank, Tempbank and the UniCredit Bank) in the amount of 15.8 billion rubles. the Loan is secured by guarantees and pledges of assets of group companies. Rate on the floating syndicate: the key rate of the Central Bank +of 4.5%.

Several banks (with total requirements 1.35 billion RUB) restructured part of the debt “Track” out of the syndicate, but to the same conditions of a minority of creditors (a period of two years, a rate significantly below the syndicate). Some of the banks having to “Track” the requirements of 1.85 billion rubles., have restructured outside the syndicate, but syndicate is one with the conditions. Another 1.1 billion rubles was restructured. Legal requirements for these loans were from the Central Bank and Agency on insurance of contributions those departments of restructuring was not involved.

The restructuring talks were conducted a year and a half. However, as the head of the legal Department SDM-Bank Alexander Golubev, given the number of participants, it is short term. The arrangements could, in his opinion, to take more time. “The timing of the implementation of the transaction depended on the need to agree common terms of financing by all banks participating in the syndicated loan, as well as non-standard transaction documentation and complex structure of the security,” — says the Director of the Department of consumer sector of the Bank “Opening” Anna Iwanicka.

The extraordinary deal

The deal attracts attention by its magnitude and timing. Initially, Alignments were 80 credit lines in rubles, dollars and euros, issued by 30 banks. “This is an absurd number of banks. Prior to this transaction, we did not think that one “cocktail” to cram as many ingredients,” says Gordienko. Thus, according to him, two-thirds of the debt was denominated in foreign currency, one-third of the total volume of loans were short-term.

Among the creditors “Route” two years ago there was a whole slice of the banking system: state-owned banks (Sberbank, Bank of Moscow), the largest credit institutions (“Otkrytie”, Alfa-Bank, MDM Bank), some foreign banks and many small banks up to the fourth hundred by assets, told the organizers of the transaction. The big banks gave long-term investment loans to the borrower, to provide good mortgages, smaller players — short loans for current activity and replenish working capital, knowing that the recipient of the loan is already “famous” lenders.

During the preparation for restructuring, the number of banks-creditors decreased: four creditor banks, the Central Bank revoked licenses (“hero”, Russtroybank, the Bank “Express-credit” and “Sovereign”); the several banks, in particular state players, the loan was repaid, some of the big banks (alpha Bank, MDM Bank) sold the loans to “Route” to other creditors. In the savings Bank, VTB (joined the Bank of Moscow), Alfa-Bank, Bin Bank (merged with MDM Bank) from a detailed review of the terms of the transaction have refused, having specified that the debt of “Highway” in front of them anymore.

The list of creditors “Route” joins ASV (100 million rbl. as the liquidator of banks, deprived of licenses) and the Bank, suddenly found themselves with the rights of requirements to “Track”. Thus, the underestimation of the risk for this borrower made not only banks, including the largest, but also the regulator, essentially dictating how banks in their regulations, and in the course of supervision how to assess the risks.

Lender of last resort

Lender “Tracks” of the Central Bank was not casual. Rights of claim under credit agreements, “Route” with Russtroybank the regulator took as collateral, providing the latest in early 2015, the funding under provision 312-P for the sum about 1 billion roubles (“On the procedure of granting by the Bank of Russia to credit institutions loans secured with assets or guarantees”). Everything, by data for December 16, the total debt of banks to the Central Bank for 312-P 780 billion rubles After the revocation of Russtroybank in December 2015, the regulator, the collateral became the property of the Central Bank.

It is interesting that, taking loans, “Route” from Russtroybank, the Central Bank took them to the first or second (highest) category of quality, the other loans it as collateral for 312-P does not accept and according to bankers, very carefully assess the quality of the banks as collateral assets. Thus, at the time to predict the financial problems that the borrower could and Bank of Russia.

In Bank from comments on the transaction have refused, citing the fact that the regulator “does not comment on its Supervisory activities and specific transactions of operating companies and banks.”

A vicious circle

Meanwhile, the Central Bank partly provoked the deterioration of payment discipline of the course. As said its General Director Oleg alexeenkov, the position of the group of companies has sharply deteriorated following the increase in the key rate in December 2014 the Bank of Russia to 17% per annum. Then in a situation of uncertainty, many banks took a time-out and froze lending. And one of the major creditors to “Track” the Bank of Moscow opened a “Track” line of credit with a limit of RUB 1.5 billion and the first tranche issued in February 2015 following the second tranche, refused to give.

“The track” tried to challenge the decision by applying to the court, but the judge took the position of the lender, says Alekseenko. “The trigger to the deterioration of the situation in “the Road” was that a large Bank refused to give the money according to the agreement signed in response to the rate hike by the Bank of Russia”, — confirms Gordienko. This trial is in the files of arbitration cases on the website “E-justice”. And it’s not the only one.

“As a result, in the period of crisis and liquidity shortfall the company has faced with the impossibility of attracting funding from a number of lenders that resulted in a working capital deficit of the company”, — says Anna Janecka, Director of consumer sector of the Bank “Opening”. After the failure of the Bank of Moscow to provide the next tranche, the company introduced the delay, began to operate the covenants on loans (terms, upon the occurrence of which the lenders are entitled to demand early repayment of loans). In the end the application about recognition of the “Track” bankrupt in 2015 was filed and Evrofinancemosnarbank. But then it was withdrawn from the court.

Having lost the ability pertinate’t come to an agreement on their own with numerous creditors, the “Highway” began to look for a deal on debt restructuring. And unequivocal assurance in its closure, according to its participants, they did not have until the very end. Director of business development with large corporate clients PSB Alexander Afonin added: “It was a tough deal. Well, the syndicate has signed.”

Significant moment

For example in this case, considering the involved quantity of different creditors, you can form an opinion, as in fact often assessed credit risks in the banking system. Despite the strict requirements of the Russian Central Bank and international standards on risk assessment, the funds were given under the filling business with the hope of the cache and without any guarantees, is recognized by some bankers-lenders “Highway” on the condition of anonymity.

Revealing the amount of the credit load according to the ratio of the scale of the business of the company. Group of companies — the operator of its own network of filling stations in the Moscow region. The company has 52 gas stations within a radius of 50 km from Moscow. The group operates a network of retail trade in their gas stations. According to SPARK, the company’s revenue in 2015 has not changed compared to the 2014 year and amounted to RUB 26 billion Net profit declined in 2015 compared to 2014, 2.4 times and amounted to 90 million rubles.

According to bankers, detailed strategies of how in practice to assess credit risk, many banks, especially small and medium, simply no. “Although all of the required CB bills with all kinds of politicians, of course, are largely corporate lending small players carry out “an acquaintance,” says one banker on condition of anonymity.

One of the frequently used options — to focus on the size of the company and the experience of its borrowing from other banks. “Many medium-sized banks before the crisis actively lend to companies with good credit portfolio and were confident in the strategy, too big to fail in the Russian market”, — says the analyst of ROSBANK Eugene Koshelev. Smaller banks to accurate estimates in the majority do not seek, using the strategy of “stick” to the customers of large banks, say representatives of small banks. As a result, if the company-the borrower have serious problems, almost all lenders can simultaneously be in the same difficult position.