Alfa-Bank plans to obtain a syndicated loan in 2000

MOSCOW — Russia's Alfa-Bank said it is planning a syndicated loan later this year and will tap international capital markets with a Eurobond Issue in the first half of 2001.

The bank paid off a maturing $193 million (EUR208.9 million) Eurobond Friday. The payment was particularly important, Alfa-Bank Chief Executive Alex Knaster said.

It distinguishes the institution from other Russian commercial banks and corporate borrowers which defaulted on Eurobonds following the country's financial crisis in 1998.

“Our decision to raise new capital in international markets will depend primarily on the cost of capital,” Mr Knaster said in a statement. “The bank will enter markets if the funding costs are in the range of 10% to 11%.” The lowest-yielding Russian Eurobond is the federal government's 2001 bond, which yielded 9,34% as of late Friday.

Alfa-Bank had light exposure to the domestic debt market and escaped the misfortunes suffered by other Russian banks in the aftermath of the government's $40 billion Treasury bill default and ruble devaluation in August 1998. But the bank was nonetheless hammered by the ensuing financial crisis and was forced to restructure a $77 million syndicated loan. (Dow Jones)