Magazine article American Banker

Chase Expanding Emerging-Markets Entry in Commercial Paper Deal for Moscow Bank

Magazine article American Banker

Chase Expanding Emerging-Markets Entry in Commercial Paper Deal for Moscow Bank

Article excerpt

Seeking to tap into the growing business of issuing short-term debt for emerging-market customers, Chase Manhattan Corp. is arranging its first such commercial paper program for a Russian bank.

Chase confirmed that it is now syndicating a $50 million program for Moscow-based InkomBank, one of Russia's largest privately held banks, with $5.1 billion of assets.

The Russian commercial paper deal is the latest by Chase, which is hoping to duplicate BankAmerica Corp.'s success in arranging U.S. commercial paper programs for borrowers in Latin America and other emerging markets.

BankAmerica began the first commercial paper program in Russia for Alfa Bank last year. Chase has been steadily making inroads into the commercial paper market for Latin American companies such as Brazil's Unibanco and Petrobras.

InkomBank is considered a highly speculative investment with a significant amount of credit risk. The bank carries a B-plus long-term debt rating from Standard & Poor's and a long-term BB rating and short-term rating of B from Fitch IBCA. Both ratings are below investment grade, meaning InkomBank must pay a fairly high yield on its borrowings.

In a meeting with reporters in New York this week, Vladimir V. Vinogradov, InkomBank's president, said he expected Chase to complete the U.S. commercial paper program by mid-June.

InkomBank, which plans to use the funding for trade-related financing, is hoping to raise $75 million to $100 million. In a similar move, the Russian bank plans to issue about $200 million of three- to five-year bonds on the Euromarkets this year. …

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