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What's NewS Issue 1 January/February 2000
Rabobank Polska has entered the Polish leasing market with a splash. For the
first time ever, a syndicated loan has been arranged for this potentially exciting
sector. By bringing in product expertise from London, the Warsaw team was able
to arrange this deal for the country's leading leasor. We find out how it worked.
Local cooperation
Market confidence
Knowledge transfer
The signing ceremony late last year
marked the final phase of a long
process that has made headlines for our
Warsaw colleagues as they closed the first
syndication arranged for a leasing
company in Poland. The cliënt, Europejski
Fundusz Leasingowy, (EFL) is a prime
example of the new hreed of entrepre-
neurial companies that have flourished in
revitalized Polish economy of the I 990s.
Opportunities for growth are significant,
in spite of a trough in Poland's economy
following the Russian crisis in 1998.
According to head of corporate banking,
Piotr Czarnecki, 'The syndication market
had been quite attractive until the slump
hit. In the first half of 1999, we saw a real
slowdown compared to the same period
in 1998. Obviously, this was due primar-
ilv to the impact of financial turmoil in
Eastern Europe. Only 47 syndicated deals
were closed in 1999, many of them with
renegotiated margin or with increased
arranger exposure. The year 2000, and
all the problems that could have arisen,
also made the market very cautious.'
Although Rabobank Polska also has a
reputation for supreme caution, the team
in Warsaw found it hard to resist the
notion of launching the first syndicated
loan for the leasing sector. But the funda
mentais had to be right. 'The cliënt is
highly respected here in Poland and
elsewhere, so we were very interested
when the owner and CEO, Leszek
Czarnecki, approached us,' says Czar
necki (no relation). Headquartered in
Wroclaw, EEL was set up in 1991 as a
limited liahility company. It develops new
business through a network of 3 1 branch
offices all over the country. The company
works with around 1,500 agents and
independent brokers. And with a 12%
market share in 1999 it's well ahead of the
competition. It provides hoth operating
and financial leasing. Most of its clients
are small and medium sized companies.
'In fact,' Czarnecki continues, 'the
company has been so suecessful that the
Wall Street Journal ranked I.eszek
Czarnecki among top ten most talented
young businessmen in emerging markets
in 1998. In I 999 EFL itself was one of the
top ten best managed companies in
Central Europe by the Central European
Economie Review.' Perhaps that is not
If you are thinking this is a lot of back
ground and attention for a comparatively
straightforward syndication deal, then in
some respects you would be right. How-
ever, our Warsaw people are keen to point
out that the syndicated deal itself has
greater ramifications, for both RI and the
customer. In a cautious market, Rabobank
Polska as arranger, agent and security
agent was able to put together a strong
syndicate for EFL. 'The participants are
primarily local subsidiaries of interna
tional banks, as well as high street banks.
We worked with some big names on this
Very well is something of an understate
ment as the ultimate three year syndicated
loan was closed for PLN 125 million
(EUR 30 million), representing a 25%
oversubscription on the deal target of
PLN 100 million. 'For us,' says Czarnecki,
'this is, we believe, an expression of the
market's confidence in Rabobank as an
arranger and in EFL as a company. For
EFL, there is no doubt that this success on
syndication market will be an important
factor for potential new investors.
That is why we see this as an important
deal, especially for our reputation in the
market. Everyone's a winner here.'
surprising when you see EFL's basic
financial ratios - ROA is 7.3% and ROE
32.4%, calculated on the basis of audited
financial statements in accordance with
US GAAP. 'We believe numbers like this
confirm that the company is on the right
strategie development track and has
strong management policy.' EFL will float
on the Warsaw Stock Eixchange in the
first quarter of this year and its prospectus
has already been approved by the Polish
Securities Commission. An internationally
Signing up for syndication - (from left to right)
Piotr Czarnecki, Dorota Filant, David McWilliam,
and EFL's executive vice president Jakub Malski
oriented prospectus is also in preparation
for an initial public offering to in London
and the US.
deal. Our co-arrangers are Deutsche Bank
Polska, Bank Przemyslowo - Handlowy
(Hypovereinsbank Group) and Bank
Gospodarstwa Krajowego (state owned
bank). A leading cooperative bank acted
as manager.'
But before our Warsaw colleagues ever
got that far, they had been working
closely with people from the London
syndications team in a knowledge
transfer exercise that has paid off.
'We provided all the support we
could,' confirms Robert Halcrow in
London. 'In the early stages, David
McWilliam and Piotr brought the
cliënt here to discuss options with
him. We then put in a product
specialist who worked with the
Warsaw team to hammer out the
details. The deal itself wasn't big
enough for the London market, but
obviously our thinking is that we
transfer knowledge to the branch
and if, at some later stage, the cliënt goes
international, we have indepth knowledge
of the company and its requirements.
So we see this initially as a knowledge
sharing exercise that has worked out very
well indeed for the branch.'
