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Lpc russias tenex nets $300 mln loan bankers


May 1 Three European banks have committed extra capital to fulfill an accordion facility agreed as part of a $300 million pre-export loan financing signed with Russian nuclear firm Tekhsnabexport(Tenex) in January, banking sources said. Deutsche Bank and Societe Generale signed the three-year loan with Tenex in January with the aim of raising up to $300 million, according to three banking sources. The agreement comprised a $150 million term loan and a $150 million accordion feature paying 385 basis points (bps) over Libor, one of the bankers said. Nordea joined the banking group in March and committed $75 million to the facility, bringing it up to $225 million, two of the bankers said.

The three banks have now agreed to commit a further $25 million each in order to complete the $150 million accordion feature. Tenex approached a much larger group of banks in February last year for a $500 million new-money loan before Russia annexed Crimea in March, triggering the geo-political crisis between Russia and the Ukraine that has effectively closed the international loan market to Russian borrowers.

"This is the last of the deals that was already in progress when the crisis happened -- it does not count as a new deal," said one of the bankers. After a bank meeting in Moscow on September 1 last year to discuss the loan, a number of banks fell out of the deal after failing to get credit approval, but the small club of banks were confident the deal would be completed.

"Tenex supplies an irreplaceable fuel supply to Western Europe and the US -- there was no way this deal was not going to get done," a second banker said. Tenex exports nuclear materials and uranium enrichment services and is owned by Russian state backed nuclear power engineering firm Atomenergoprom, a Rosatom company. Rosatom was founded in 2007 by Russian president Vladimir Putin. Tenex could not be immediately reached for comment.

Money markets bailout prospects keep spanish repo rates stable


Oct 11 The cost of borrowing cash using Spanish government bonds as collateral was little changed on Thursday as the prospect of European Central Bank debt purchases offset the impact of a downgrade in Spain's rating. Standard & Poor's cut the country's rating to BBB-minus, with a negative outlook, just one notch above non-investment grade and in line with fellow agency Moody's, which is expected to conclude its own rating review this month. Usually, when debt is downgraded, rates in repo markets - where bonds are used as collateral to borrow cash - go up. That is because the price of the bond falls and the value of the collateral is perceived as having depreciated. However, the likelihood that Spain will eventually ask for a bailout kept markets stable. An aid request would activate the European Central Bank's unlimited bond buying programme and protect the value of the bonds - at least for a while.

Also, lending terms in Spanish repo markets rarely go beyond one week as lenders are reluctant to offer cash to banks that have been severely hit by a property bust. Short-term lending rates are less sensitive to the value of collateral than longer-dated rates."The rates which people are actually lending at have not changed much, it only brings it in line with Moody's ... and the market is much more focused on whether they're going to ask for a bailout or not," one repo trader said. The one-week repo rate for trades using Spanish bonds as collateral was unchanged at 0.15-0.16 percent, according to traders. In secondary bond markets, 10-year Spanish yields rose as high as 5.96 percent early in the session as an immediate reaction to the downgrade before pulling back to 5.78 percent, below Wednesday's levels.

A well-bid Italian debt auction also helped increase investors' appetite to take risks."Repo rates didn't move because in the short-term risk (sentiment) is still on and the Italian auction was fine," said Matteo Regesta, rate strategist at BNP Paribas.

He said a Moody's downgrade may have a stronger impact on the repo market as it will bring the rating of the bonds into "junk" territory. If repo rates rise, Spanish banks' dependency on cash from the ECB could increase. Data from Bank of Spain showed Spanish banks borrowed 400 billion euros from the ECB in September, down from 412 billion euros in August."This is the effect of the 'Draghi' put," said Commerzbank rate strategist Benjamin Schroeder, referring to ECB President Mario Draghi's pledge that the ECB would buy bonds of troubled countries if they seek assistance."But when they activate it ... the (availability of bonds as) collateral will actually be getting scarcer," he said, adding that volumes in repo markets would suffer as a result and banks may have to rely on ECB liquidity even more.