The growth and development of Russian industry force many companies to extend their production capacities, implement modern production and processing systems, purchase new equipment etc. Keeping up with the times, the Bank makes special focus on financing of complicated long-term projects of its customers, provided that one of the most frequently used instruments is financing under the guarantees of export agencies.

As opposed to the standard L/C scheme, the transaction includes one more player – an export agency of the supplier’s country that is in charge of “insurance” of a foreign creditor bank by assuming risks of a Russian bank. Export agencies are state institutions vectored to propel the export from this country. That is why they eagerly assume risks for longer periods, as usual commercial banks.

National insurers of many European, Asian and North American counties (including HERMES (Germany), EDC (Canada), Eximbank (the USA), OeKB (Austria), CESCE (Spain), SACE (Italy), EGAP (the Czech Republic), SEС (Slovenia), MEHIB (Hungary), KUKE (Poland), OND (Belgium), KEXIM (Korea), EKN (Sweden), Finnvera (Finland), COFACE (France) and others) opened long-term financing limits in favor of Promsvyazbank enabling us to fund middle- and long-term projects of our customers related to capital Goods supply or construction on lower rates out of the funds of foreign banks.

Description of the Product.

Financing of middle- and long-term (up to 12 years) projects related to import of capital goods or construction works/services out of the funds of international banks under the guarantees of national export insurance agencies.

Consumers of the product: legal entities with any form of ownership – importers of capital Goods (equipment, entire processing systems etc.), related services (supervised installation, engineering etc.) and construction works/services.

Advantages of the Product:

• Reasonable cost.
• Long grace period prior to repayment of the principal amount – the first payment shall be made in 6 months after input of equipment into operation or end of construction.

Tenor:

• Repayment of a loan within three – twelve years.
• The tenor shall be calculated from the “start date” which may be the date of delivery, input into operation or end of construction.
• Loan is repaid in equal (not less that) semiannual installments.
• The Customer is given a grace period with respect to the principal amount, the first payment is made in 90 days or in 180 days from the “start date”.
• Interest is due and payable monthly or quarterly.

Conditions:

• Transaction amount shall not be less than USD1 mln.
• Subject of delivery shall be new equipment.
• Business of the borrower must be stable.
• Business-plan is obligatory.
• Loan amount shall not exceed 85% of the contract value.
• Remaining 15% shall be paid as a down payment:
• out of own funds
• by a usual loan
• by a L/C
• Partial financing of Russian expenses is possible.
• Germany related transactions require additional surety of the borrower for PSB against the German bank (requirement of HERMES).

Procedure for obtaining the service:

1. Furnishing of preliminary information:
• Country and date of delivery
• Tenure of payment
• Term of input of equipment into operation
• Amount
2. Promsvyazbank makes offer of the possibility to finance
3. Discussion with a supplier
4. Loan application/Loan application appraisal
5. Decision making / approval of payment terms under the agreement
6. Financing