OREANDA-NEWS. June 23, 2008. Alliance Bank (LSE: ALLB) announced that it has made two scheduled syndicated loan repayments for a total amount of USD 323.5 million.

On June 17th, Alliance Bank repaid Tranche 1 of USD 176.5 million of syndicated loan, raised on June 13, 2007 for the total amount of USD 400 million.

Consequently, on June 20th, Alliance Bank fully repaid the second tranche of USD 147 million of the syndicated loan raised on June 26, 2006 for the total amount of USD 400 million and, thus fully meeting its obligations under this loan.

Syndicated loan dated June 13, 2007 was raised under a 2-tranche structure - 370 days and 2 years. Arab Bank plc, Commerzbank Aktiengesellschaft, Standard Chartered Bank and Sumitomo Mitsui Banking Corporation Europe Limited acted as Mandated Lead Arrangers of subject transaction.

Syndicated loan dated June 20, 2006 was provided by a syndicate of banks, split into 2 tranches –1 and 2 years. Transaction was led by Bank of Tokyo-Mitsubishi UFJ, Ltd., Citigroup, Raiffeisen Zentralbank Osterreich AG and Standard Chartered Bank acting as MLAs.

As was previously said, Alliance Bank’s foreign indebtedness for a total amount of USD 1 billion 22 million is to be repaid for the whole year of 2008. As of June 30th, the Bank will have repaid 70% of total foreign liabilities with payments made in accordance with the schedule.

Last repayment for the first half of 2008 of USD 156,75 million of debut Eurobond issue will be executed on June 26th. Having repaid that, the Bank will have approximately USD 300 million-worth of foreign liabilities to meet before the end of the year. It should be noted that the Bank’s foreign repayment schedule is well-distributed for the subsequent years that allows the Bank to manage its liquidity successfully.

Due to the effective business model, Alliance Bank has sufficient liquidity level to settle all assumed obligations both this and subsequent years. Originally, personal installment loans were the key segment of the Bank’s business model, characterized by its high net interest margin and quick loan portfolio turnover.

PIL scheduled repayment proceeds will be a major contribution to Alliance Bank’s foreign repayments. The average life of PILs is about three years, thus, PIL repayments during one year cover almost one third of PIL portfolio. It is planned that in 2008 PIL principal repayments of Alliance Bank will total approximately USD 700 million, less repayments under other loans granted to retail and corporate customers.