Loginsky Andrey

Loginsky Andrey

A person who contributed to the rise of the financial industry of Russia to a new level

From 2005 to 2020, several key transactions were conducted in the domestic financial market, which laid practical foundations for the syndicated lending market, Eurobond issuance and IPO of Russian companies. The successful implementation of a large number of such operations belongs to the Russian financier Andrei Loginsky, whose work was repeatedly awarded the Deal of the Year awards from financial expert publications, including Global Trade Review, Trade Finance Magazine and EMEA Finance Magazine. About how Andrei Loginsky for a decade and a half brought the Russian financial sector to a new level, read this article.

Mechanism that changed the practice of syndicated lending in Russia

Andrei Loginsky became the head of the financial resources department PIPE METALLURGIC COMPANY in 2003. Immediately after his appointment, the young leader gathered a team around him, with the help of which he managed to develop and implement a mechanism for attracting financing for the company through a new product: a syndicated loan from foreign banks without physical collateral of enterprise assets, guaranteed only by a concession of export revenue. This type of transaction was the first in the Russian pipe industry, despite the fact that its implementation was complicated by restrictions on foreign exchange legislation and other prohibitions in force at that time.

At the end of the negotiation process, which took several months, TMK enterprises were granted a loan from a syndicate of foreign banks in the amount of $50 million. This not only helped the company significantly reduce the total value of borrowed funds, but also became an example for other domestic exporters. The new type of borrowing for the Russian market had a significant impact on the entire industry. The experience of TMK was adopted by other Russian exporting companies, which later also gained access to global financial sources.

The deal that opened the way for Russian borrowers to world finance

In 2006, Andrei Loginsky's team implemented another innovative deal that changed the practice of syndicated lending in Russia. TMK raised a syndicated loan of $155 million with the participation of Russian and foreign banks, including the largest European financial institutions - Naxitis, UniCredit and ING. This transaction was first fully carried out in Russian law. The new mechanism allowed foreign creditors to accept the risks of the Russian borrower in the Russian legal field. It is worth noting that previously such transactions were concluded exclusively in foreign law. The developed structure opened the possibility of providing credit with domestic Russian commodity supplies, a new type of transaction security, convenient for Russian manufacturers with limited export capabilities.

The practical implementation of this transaction opened the way for TMK to Western sources of financing, such as the placement of Eurobonds, and subsequently an IPO. At the same time, other Russian borrowers received an example of successful access to world financial markets.

Eurobonds placement in metallurgy: a breakthrough in the industry

In the mid-2000s, Russian corporations sought to diversify their sources of financing, and the corporate Eurobond market Russia was at an early stage of development. At that time, there were only a few issues of Eurobonds outside the Russian corporate space, especially among the companies issuing the metallurgical sector. In mid-2006, Andrei Loginsky's team, with the support of Western banks, successfully placed debut Eurobonds in the amount of $300 million. USA Thus, the company PIPE METALLURGIC COMPANY carried out the largest issue of Eurobonds among Russian pipe workers. This operation was a turning point for the entire domestic metallurgical industry.

Now we can confidently say that the debut placement of TMK Eurobonds has become a revolutionary transaction not only for the issuing company, but also for the entire industry, opening access to other metallurgical companies and companies with lower credit quality to international debt capital markets.

Output to IPO

The next success of the financial resources management team was participation in the initial offering of TMK shares on the London and Moscow stock exchanges at the same time. This process required synchronous coordination of the actions of a large number of involved parties: rating agencies, banks, lawyers, auditors, creditors of the company and the exchanges themselves.

The whole process took several months, and ended in October 2006, as reported by world and Russian news agencies, including Reuters and RBC. The initial offering of shares made it possible to attract about $1 billion, and the total volume of applications for the placement price exceeded the offer by 19 times.

Largely as a result of this transaction, in the next 2007, TMK reached a record capitalization of almost 10 billion US dollars.

Issue of Transaero bonds, which saved the airline giant

In 2008, Andrei joined the team of AK Transaero, the second largest player in the passenger air transportation market. At that time, the aviation industry was faced with a sharp reduction in passenger traffic, resulting from the global financial crisis. To overcome these challenges, the company resorted to the search for extra-class specialists, creating the Directorate of Financial and Investment Programs, headed by Andrei.

His work focused on restructuring the debt portfolio and finding options for financing the company. In a new place, Andrei was required to demonstrate the ability to find extraordinary solutions against the backdrop of the global crisis in the economy and industry. The largest successful capital raising deal was the placement of Transaero exchange-traded bonds in 2009. As a result of this financing, according to Forbes, the total volume of initial placement amounted to 3 billion rubles, and the company received a long tax-free tool to finance its main operations and expand the fleet.

6 transactions that affected the development of the financial market of Russia

In 2010, Andrei Loginsky changed his field of activity and transferred to work at Raiffeisenbank, where as executive director he headed the Department for Work with Enterprises of the Ferrous and Non-Ferrous Metallurgy and Chemical Industry.

During this period, the bank conducted several transactions that contributed to the recovery of Russian industry after the global financial crisis. So, many enterprises have been able to restructure and refinance existing obligations, as well as attract funds for further development.

Among the key transactions conducted with the direct participation of the Department of Andrei Loginsky, those that significantly influenced the development of the entire industrial potential of Russia were recognized as the most successful:

1.Inditioned loan of Uralkali company in the amount of 1 billion US dollars, thanks to which the loan of Sberbank for the purchase of a license for the Polovodskoye field was restructured. Awarded the 2011 Deal according to Trade Finance magazine.

2. A loan to Uralchem in the amount of US $220 million issued in 2012, which returned the company to normal functioning after the crisis. Awarded the Deal of the Year award.

3. A $1 billion induced loan from Mechel, which allowed to restructure debt, increase liquidity and invest in the development of the metallurgical company's fields.

4.Inditioned loan of Uralkali company in the amount of more than 1 billion US dollars, which made it possible for the borrower to significantly increase production capacity. He was awarded the Deal of the Year award in 2013.

5. Refinancing of ChelPipe's loan portfolio in the amount of more than 86 billion rubles with the participation of nineteen banks and partial guarantee of the Russian Government. The deal, conducted in 2013, helped ChelPipe successfully overcome the difficult post-crisis period.

6. A loan to Norilsk Nickel in the amount of 350 million US dollars, issued in 2014.

Recovery of medium-sized businesses in the midst of the 2014 crisis

In the period from 2014 to 2016, Andrei Loginsky joined the VOLGA Capital investment company. In the position of managing director, he focused on the financing of small and medium-sized businesses and the development of regional projects.

At the height of the Russian economic crisis of 2014, Andrei once again had the opportunity to show professionalism in finding non-standard financial solutions. So, with his direct participation, VOLGA Capital organized and held an economic forum dedicated to the problems of project financing in a crisis. Subsequently, this forum helped to implement many regional projects.

In the future, already managing the Professional Alliance company, Andrei acted as an independent expert on crisis management and debt financing transactions for medium-sized businesses. One of the achievements during this period was a transaction in the form of reverse leasing with the participation of Sberbank and Sberbank Leasing for TTK-Trans, which allowed the company to avoid default by restructuring the debt portfolio, significantly extending the maturity and retaining the main production assets - almost a thousand covered railway cars and tank cars.

Forward development

In 2020, Andrei continues to develop and implement non-standard methods for solving financial problems caused this time by the COVID-19 pandemic. Now his experience and professionalism can be appreciated by companies from the USA, where Andrei undergoes postgraduate practice after completing his studies at Hult International Business School in Massachusetts (USA), where in 2019 he brilliantly defended his master's degree in business administration, and in 2020 - master of finance.

Author: Sergey Sinitsyn

Published: December 14, 2020