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Loans

BSTDB offers a wide range of loans, which enables it to respond flexibly and effectively to the diverse needs of its clients and to address their specific financial risk. BSTDB tailors loans to specific financial requirements of its clients, including project, corporate and trade transactions, and affords its clients the benefit of the most sophisticated financial techniques available in the international financial markets.

BSTDB provides loans to private and state owned entities. BSTDB will offer a range of short–to–long term loan products on both variable and fixed bases. Loans are normally to be secured, although BSTDB may accept an unsecured position where this is judged to be consistent with sound banking principles. Loan covenants must be considered which will ensure the maintenance of a balanced financial structure.

Loans extended by BSTDB may be denominated in any currency, including local currencies, or a combination of currencies in which BSTDB is able to fund itself. Most loans will be medium to long term, i.e. outstanding for more than one year. BSTDB’s Financial Policies stipulate that pricing must be determined taking into account, cost of capital employed, level of risks involved, administration and operating costs incurred in generating, implementing and monitoring a loan as well as income requirements. Fees and commissions may be charged consistent with principles set out in the Bank’s Financial Policy. This includes front-end commission as well as commitment charges, prepayment and conversion fees.

  • Project Finance Loans

    All project loans (sovereign and non-sovereign risk) will be fully assessed by BSTDB on the aspects of risk / return, repayment prospects and the capacities of the borrowers’ guarantors. BSTDB may provide loans for entirely new ventures or the expansion or modernization of existing operations. Usually BSTDB will be repaid from the cash flow of the venture. In exceptional circumstances BSTDB may provide loans with maturity longer than 10 years.

    BSTDB may act either as a member of a financing syndicate, or as a separate financier. Where BSTDB considers it appropriate to provide financing separately from the main financing syndicate, it may do so either for the general purposes of the project, or it may identify a portion or a sub-section of the project, largely independent from the overall project, which it may finance wholly or partly.

  • Corporate Loans

    Corporate loans are provided by BSTDB to companies (private entities, public/quasi-public institutions and/or agencies, financial institutions) in order to cover expenses such as, among others, purchasing equipment and inventories, acquiring other businesses, paying suppliers of utilities and meeting payrolls. In the general sense their coverage may be expanded to include all Balance-Sheet facilities.

    Corporate loans are offered for periods not exceeding five years, although in well-justified cases may extend to seven years. The minimum size of the loan, for cost-effectiveness reasons, should be US$ 3 million, or its equivalent in another acceptable currency. Exceptions for corporate loan operations in small shareholder countries are possible, but would need to (i) achieve a minimum level of profitability and (ii) be justified persuasively.

    Types of Corporate Loans offered by BSTDB:

    • Investment loans
    • Construction Financing
    • Mezzanine Financing
    • Financing of Acquisitions of Other Businesses
    • Working Capital

  • Credit Lines

    Credit lines have the purpose to provide selected banks with short to medium-term capital not available in the market and to encourage establishment of long term relationship between these banks and their clients in particular for trade finance operations and provision of medium term financing to SMEs. Only financial institutions being authorized by BSTDB as financial intermediaries are eligible to participate as borrowers for on-lending.

    Financing is normally to be provided in the form of revolving funds but may also be in the form of back-to back facilities or bullet loans through intermediary/client financial institutions incorporated in the respective member country, with an acceptable branch network, prior good quality experience in trade finance, leasing or SME financing, controlled by local and/or regional interests, when possible. The credit line shall normally have a maturity of 3 to 7 years.

    As a rule, BSTDB will only take the risk of the financial intermediary, and not that of the recipient of the sub-loan.

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