* Syndicated loans for CEE, Middle East and Africa
* Up 50 pct year-on-year
* Off peak of $124 bln in H1 2008
* Facing H2 headwinds
By Christopher Mangham
LONDON, July 6 (Reuters) - Central and eastern Europe,
Middle East and Africa (CEEMEA) firms raised $54 billion in the
first half, according to Thomson Reuters LPC data released on
Tuesday, although higher costs could hit second-half volumes.
The figure, a 50 percent gain on last year's $36 billion, is
still less than half the regional record of $124 billion raised
in the first half of 2008, before the financial crisis hit, the
data showed.
The bulk of the loan volume has been for financings secured
against assets or exports, including Russian energy company
Gazprom's <GAZP.MM> $5.4 billion Nord Stream project loan,
signed in the first quarter, which accounts for 10 percent of
the regional total.
CEEMEA's corporate loans in 2010, including deals that have
yet to sign but are in the syndication process, total $44
billion, of which $27 billion, or 61 percent, are secured deals,
the data shows.
Middle East loan volume totalled $22 billion in the first
half of 2010, up from $18.4 billion in the same period last
year, but down 63 percent from $60 billion in the first half of
2008.
Russian companies have signed $11.5 billion of loans in the
first six months of 2010, up from $5 billion in the same period
last year, but down 70 percent from a high of $39 billion in the
first half of 2008.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic of loan volume
http://graphics.thomsonreuters.com/10/GLB_ELNV0710.jpg
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
BANK FUNDING COSTS
Hopes that loan activity could pick up in the remainder of
the year have been put on ice as loans for emerging market
borrowers have been threatened by increased bank funding costs
arising from the euro zone crisis, loan syndicators said.
The cost and scarcity of dollars reduced demand from smaller
banks to join loans and caused arranging banks to review their
lending strategy, bankers said.
The euro zone sovereign debt crisis halted the slide in loan
pricing that had encouraged companies to consider tapping the
loan market but borrowers pulled out of financing talks as banks
demanded higher margins.
"There was much talk about various lending opportunities but
since I have seen many withdrawing their bonds and postponing
loan plans," one emerging markets loan specialist said.
"The key may be in dollar availability, the funding cost
which is increasing and general uncertainty which way the
economy -- and pricing -- goes."
PRE-EXPORT FINANCING
Pre-export financings, where loans are secured on exports,
have been a rare success story this year, with lenders attracted
by the yield and the security on offer, bankers said.
Ghana's Cocobod, state-owned Egyptian General Petroleum Corp
(EGPC), Ghana National Petroleum Co, Ukrainian steelmaker
Metinvest, Russian oil firm Gazprom Neft <SIBN.MM> and Russian
steel firm Mechel <MTL.N> are all in various stages of
syndication with loans worth a total of $7 billion.
Russian oil company Tatneft's <TATN3.MM> $2 billion
pre-export financing, signed in June, was the country's first
corporate loan of 2010, and Russia's largest coal producer SUEK
has started loan talks for a $500-700 million facility.
"Pre-export is the success story this year. It's about banks
having specific pre-export finance teams, and they offer a
better return than unsecured deals," a banker said.
While there is concern over the increasing cost of funds,
these top borrowers have been able to rely on relationship banks
with strong balance sheets and are taking advantage of a lack of
deal volume to secure the best terms, bankers said.
This was illustrated at the end of June, when Gazprom Neft
was able to reduce the margin on its $1 billion loan to 210
basis points (bps) over LIBOR from 240 bps after the deal was
oversubscribed at the senior level. [].
(Editing by Simon Jessop)
