Russian banks for the first time carried out the transaction on granting a syndicated loan in digital format. So far it looks like the pilot project, however, the isolation in a pandemic is pushing banks to become more active introducing distant forms of work, including corporate clients. In the future, this will allow the banks to expand the geography of transactions.Coordinating authorized leading organizer of the loan was Raiffeisen Bank, whose representative told “Kommersant” about the deal. The syndicate was attended by Alfa-Bank and ROSBANK (authorized leading organizers), the international investment Bank and OTP Bank (lead arrangers). The recipient of a seven-year syndicated loan worth up to 9.1 billion RUB was Rosvodokanal, the largest private operator in the sphere of water supply and sanitation. The company plans to use the proceeds to refinance existing corporate debt and funding capital expenditures. At the initial stage of Rosvodokanal uses part of the limit of RUB 4.1 billion balance the company plans to use to Finance the concession agreements and mergers and acquisitions.Syndicated lending — a standard practice in big business, however, the first syndicated loan was provided entirely remotely, in digital format. The loan agreement was signed in the Russian law in the form of standardised documentation for syndicated loans, but the parties to the transaction used the reinforced qualified digital signature (UCAP).Syndicated loans in a digital format have two important advantages over the traditional format, the head of Department on work with large companies and management of investment banking products, Raiffeisenbank Dmitry sredine, geographical coverage and tolerance for mistakes. “Often, all parties to the transaction, it is difficult to gather in one place for signing documents, especially if a lot of participants, and they are located in different regions. If the document has errors such as incorrectly specified as a legal entity, it is easy to fix in digital format, and no need to re-print and sign offline a lot of contracts between many parties,” he explains. The choice of digital format dictated by the structure of the transaction, namely, multiplicity of parties and the geographical disunity of the borrowers, stressed the first Deputy Chairman of the management Board of ROSBANK Parisat Shayhina. “Quarantine restrictions have accelerated the development of the technological base for the formation of contracts in a digital format,”— said the head of the Department debt capital markets, Alfa-Bank David Matlock. In the future this practice will become standard for encapsulationand contracts, he said.Syndicated lending is an important instrument of borrowing for large businesses, because it allows the largest players to receive significant funds on business development. For banks, this mechanism gives the opportunity to participate in the deal for an important client, but at the same time effectively manage their risk and do not exceed the concentration of credit risk on the counterparty, certain internal policies, says the head of group on rendering of services to companies in the financial sector Deloitte Maxim Salutin. Modern technologies offer various options for such transactions. According to Deloitte in November 2018 Spanish Bank BBVA held its first syndicated transaction using blockchain technology, in may 2019, the largest European banks — BNP Paribas, Natixis and Societe Generale — have declared their connection to the blockchain LenderComm Fusion framework, designed to simplify the process of syndication. However, such transactions entirely in electronic form is not yet a generally accepted trend in the banking market and yet is more of a pilot nature, emphasizes Mr. Malutin.Polina Trifonova
