Redcliffe Partners has worked with Clifford Chance in advising EBRD on unfunded risk participation agreements with Ukrsibbank valued at up to USD 50 million.
The arrangement will allow Ukrsibbank to share with EBRD the risks of non-performance of Ukrsibbank borrowers. The EBRD's risk sharing program is aimed at restarting lending in Ukraine, as well as supporting sound lending practices.
According to Redcliffe, "the concept of risk sharing is not known to Ukrainian law. Therefore, for the purposes of the project, Redcliffe assisted in developing a sophisticated structure to implement the intended risk sharing in Ukraine. Also, Redcliffe reviewed the risk participation agreement and related documentation from the perspective of Ukrainian law, negotiated with Ukrsibbankand upgraded the local loan templates to EBRD’s standards."
In addition, the firm reports, "the signed risk sharing agreement will allow EBRD to induce, inter alia, lending by Ukrsibbank to the local market in different currencies (including the Ukrainian hryvnia) to medium and small Ukrainian businesses. In order to become eligible for loans risk shared by EBRD, the Ukrainian companies will need to comply with the highest business standards, conduct their business with due diligence and efficiency, and in accordance with sound engineering, financial, business and environmental practices."
Redcliffe’s team included Managing Partner Olexiy Soshenko and Associate Olesia Mykhailenko.
Clifford Chance advised the EBRD on English law aspects, their lead partner working on the deal being Jared Grubb.