24976 - Limited Liability Company Rusfinance Bank

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Summary of Proposed Investment

Project Number

24976

Company Name

RUSFINANS BANK, OOO

Date SPI Disclosed

Apr 5, 2006

Country

Russian Federation

Industry

Financial Markets

Projected Board Date

May 5, 2006

Status

Completed

Sector

Commercial Banking - General

Department

Regional Industry FIG LAC & EUR

Environmental Category

C - No Impact

Previous Events

Approved : Jul 6, 2006
Signed : Nov 14, 2006

Project Description

The project is to provide a partial credit guarantee and thereby credit enhance a Ruble-denominated bond issue by Commercial Bank Rusfinance Bank Limited Liability Company (Rusfinance Bank or the Bank). The bond issue will be for an expected aggregate of up to RUR 3 billion and with an expected maturity of 2 years. This credit enhancement will be in the form of an IFC partial credit guarantee that would cover all principal and interest payment shortfalls up to a maximum amount equal to 50 percent of the initial outstanding principal amount of the bond.

Rusfinance Bank is a medium-sized regional bank based in Samara, an industrial city situated in the Lower Volga region. The Bank specializes in short to mid term consumer lending, particularly for automobile acquisition. The Bank is present in over 38 regions of Russia, with the portfolio well-diversified between regions.

IFC would enable Rusfinance Bank to tap domestic capital markets to obtain much needed longer term local currency funding with which to further develop its consumer finance business.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	49.28
Loan
Equity

Development Impact

The project is expected to have a strong development impact by introducing an effective way to foster competition in the consumer finance market in Russia and helping the Russian financial system move towards modern banking practices. An IFC-backed bond would help Rusfinance Bank gain significant visibility in the Russian capital market and serve as an effective vehicle by which to introduce this innovative and fast-growing specialized financial institution to investors. By using its international reputation and bringing solid structuring expertise, IFC would enable an IFC existing client to tap domestic capital markets to obtain longer term local currency funding with which to further develop its consumer finance business. As local investors become more familiar with Rusfinance Bank as a borrower, the institution should be able to issue bonds in the future on its own, which is central to its funding strategy and paramount to its future development. Moreover, the successful issuance of unsecured bonds should allow Rusfinance Bank to consider at a later stage other, more complex, funding options such as securitization. Thus, the project is the first step in providing Rusfinance Bank with a greater variety of funding options and the ability to access a deeper and broader investor base in the future.

Contacts

For Inquiries About the Project, Contact

Jean-Marie Mass, Head
jmasse@ifc.org

Dimitre Mitov, Sr. Investment Officer
dmitov@ifc.org

This Summary of Project Information (SPI) is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

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