Today, 3 May, Parex banka has made the last international syndicated loan payment in the amount of 164 million Lats. The payment has been made from the Bank’s own capital without attracting state budgetary funds. Hence, the state budget has been safeguarded and the prior and the most vital obligations of the Bank have been settled in full.
“Considering the complicated fiscal situation in the country and difficult political decisions that the government has to make regarding budget consolidation, I am truly satisfied with the achievements of the new team of the Bank. We have managed to square accounts with the syndicated loan providers thus relieving the state budget and taxpayers from obligations as large as 164 million Lats,” emphasises Christopher Gwilliam, chairman of Parex banka’s Executive Board.
“Distinguished participants of the international markets followed the events and were truly interested whether Parex banka will be able to meet the impressive loan obligations on its own; they deemed the upcoming ability or inability as an important indicator of the recovery of the Latvian economy. Therefore, timely repayment of the syndicated loan without claiming the state guarantee is a remarkably positive signal to foreign investors and rating agencies. It gives evidence about gradual recovery of the economy and confirms that the government has made the right decisions and implemented the right strategy as to solving problems of the banking sector,” says Christopher Gwilliam.
According to the Restructuring plan approved by Parex banka, most part of the notable sum was recovered via restructuring of the distressed assets at disposal of the Bank and sale of securities. For the purpose of the loan repayment Parex banka has attracted all free monetary resources that had been accrued which has strenghthened the Bank’s confidence that it will have enough cash both for timely settlements with the lenders and for further economic activity of the bank.
Due to the cautious strategy that Parex banka chose the Bank has been able to avoid fire-sale of assets. Considering the depressed real estate market and still relatively low price level, in most of the cases the price offered by buyers was many times lower than that established by experts of the bank. Thereby, number of deals with real estates has been insignificant and has not contributed to the total sum necessary for the loan repayment.
“I would like to thank everyone – employees of the Bank, the Financial and Capital Commission Market, the Ministry of Finance and the State Treasury. All of them have worked hard and have helped to overcome many seemingly insurmountable difficulties. Today I can announce that we have successfully accomplished our first important task,” emphasises Mr Gwilliam.

Information about the syndicated loan:
On 29 June 2007 under the guidance of the former members of the Executive Board V.Kargins and V.Krasovickis Parex banka entered into an agreement on receiving two syndicated loans for a total sum 500 million Euro with a two year maturity as of signing the agreement. The said deal was refinancing to the previous syndicated loan for a total sum 310 million Euro which matured in July 2007. It was planned to use the residual resources to develop activity of the bank.

On 8 November 2008 the majority interest of Parex banka was taken over by state and thereby the state assumed the obligations entered into between Parex banka and the syndicated loan providers.

Parex banka covered the syndicated loan in the amount of 163.4 million Lats in March 2009, the next payment was due in February 2010 when Parex banka repaid 217.8 million Lats. The last syndicated loan payment to the international lenders was made on 3 May 2011.


About Parex banka:
Since 1 August 2010 Parex banka is a resolution bank and has ceased to render such classic banking services as account and deposit services, loan issuing and others. Now the main objective of Parex banka is maximum recovery of the state investments. In order to achieve its goals, the operation of Parex banka is focused on efficient loan restructuring, debt recovery and real estate management.
At the time being, assets of Parex banka, estimated to be equal to 800 million Lats, are managed by a team of highly qualified specialists. According to globally accepted standards, Parex banka with its relatively small number of staff members is considered to be a very efficient organization. The success of such enterprise model lies in advised attraction of outsourcing service providers and continuous evaluation of administrative resources.




Additional information:
Marita Ozoliņa-Tumanovska
Head of Communication and Marketing Department
Telephone: 67779142 or 29287169
E-mail: Marita.Ozolina@parex.lv