1. Property Finance by EBRD
Oxana Selska, Senior Banker
25 September 2009
Ekaterinburg

2. Cumulative commitments €44.39 billion
EBRD is:
Established in 1991
Operates in 30 countries from central Europe to central Asia
2,750 signed projects
€44.39 bln commitments
Total project value € bln
Cumulative commitments €44.39 billion
As of 30 June 2009

3. EBRD Involvement in the Property Sector
Total commitments as of 30 June 2009:
€1.82 billion to 107 projects (including equity participation in funds)
€6.5 billion total project value

4. EBRD: general project features
Project makes economic sense - no “soft loans”
Substantial equity contributions by the project sponsor, incl. cash
For commercial projects, need for private investment
Usual need for a B lender
Limited re-financing

5. EBRD Financing Instruments
Debt
Equity / Mezzanine
Senior, subordinated debt, convertible
Syndication
Denominated in major currencies
Tailor-made security package
Common stock or preferred shares
Minority positions only
Flexible exit strategies
Mezzanine loans

6. EBRD Portfolio – Geographic Distribution
As of 30 June 2009

7. Current Portfolio by type of financing
As of 30 June 2009

8. Property Commitments by sector
As of 30 June 2009

9. EBRD Real Estate PARTNERS: TYPE: Office Buildings
Retail / Shopping centres
Warehouses
Mixed-use facilities
Hotels and resorts
Property Funds, Joint-Ventures
Residential
PARTNERS:
Real Estate Developers
Real Estate Funds
Operators
FINANCIAL INSTRUMENTS:
Senior Debt
Mezzanine / Quasi-Equity
Equity

10. What is on the Market with EBRD
Investments in
Developers
GRDC
GTC
Trigranit
BSR
Tourism & Hospitality
Jadranka Hotels
(Croatia)
Equity Funds
Marbleton Fund
Europolis I, II, III
Heitman I, II, IV
Accession Fund
Global
Polonia
BPH
Bluehouse II
Arka Property Fund
Russia Developer Fund
Commercial Real Estate
IKEA Mega Mall (Russia)
BD Logistics (Russia)
Raven Russia Novosibirsk (Russia)
Saratov Shopping Centre (Russia)
GTC Regional Retail (Romania)
19 Avenue Office (Serbia)
Kashirka Mall (Russia)
Chisinau Shopping Mall (Moldova
East Gate – Tirana Shopping Mall (Albania)
Europolis Sema Park (Romania)

11. Typical EBRD financing to real estate
Financing tailored to the needs and risk nature of each project
Long-term (7-10 years)
Local / foreign currency
Target gearing varies
Competitive pricing
Clear and fair distribution of risks and returns between different financing partners
Alignment of each financing feature (timing of disbursement / repayment, level of return, etc.) with the underlying risk nature
Financing predominantly for new developments; acquisition financing limited to date

12. Structuring solutions
Project Finance can work for large developments
Ring-fenced projects, often with developers/property managers
Equity component can reduce loan pricing
Project completion mitigation (turnkey contracts, sponsor support agreed)
Separation of property assets
Arm’s length leases, separate companies
Financial investors alongside developers/property managers 12

13. Minority equity partner(s)
Financing structures
Debt Project Finance
EBRD
Sponsor
Majority ownership + property management control
Project Company
Debt /
Equity
A-loan (maximum 35% of total project costs)
Limited recourse to sponsor
Security on real estate
Equity
May be divided into operating and real estate entities
Minority equity partner(s)
Co-financing
Banks
Possible EBRD equity (a small % of debt amount)
B-lender or parallel lender
Note: details are simplified for case study 13

14. Financing structures Equity Finance 14 Sponsor Project Company EBRD
Ordinary Equity /
Portage Equity /
Mezzanine
Ordinary
Equity
Project Company
EBRD
Majority ownership and management control
EBRD exit through a put to Sponsor with pricing in a range depending on performance of the Company.
Alternative is full risk equity or secured debt after certain “Project Completion” financial targets are met by Project Company or mezzanine financing.
EBRD risk can be limited to specified (such as political risk) events with guarantee from Sponsor to apply in other cases.
Minority partner
Note: details are simplified for case study 14

15. How to best attract EBRD financing?
General principles, applicable to all sectors
Sound integrity
Energy efficient projects
Transparency / early dialogue
Proven track record and market knowledge
Equity cash exposure
Clear business plan
Robust creditworthiness
Equity investors – key driver: ROE
Lenders - key driver: Project cash flows / DSCR

16. How EBRD can help Direct support Help to secure additional financing
Advice in structuring the project
As an active or impartial shareholder, in equity investments
As an involved lender, in loans
Help to secure additional financing
Preferred creditor status to attract commercial lenders
Investors
Political comfort
Due diligence “stamp”

17. Property and Tourism team contact
Sergei Gutnik, Senior Banker, Property&Tourism
EBRD Moscow
Tel: