ANNOUNCEMENT 10 May 2017
On 10 May 2017, the Russian government announced a new program of state loan guarantees, targeting primarily the defense industry.
NUMBER OF INTERVENTIONS
Resolution of the Russian Government N549 dated 10.05.2017, "О государственных гарантиях Российской Федерации по кредитам или облигационным займам, привлекаемым юридическими лицами на цели, установленные Правительством Российской Федерации в рамках мер, направленных на решение неотложных задач по обеспечению устойчивости экономического развития" ("On state guarantees of the Russian Federation for loans or bonds attracted by legal entities for the purposes established by the Government of the Russian Federation as part of measures aimed at solving urgent tasks to ensure the sustainability of economic development"), http://government.ru/docs/27647/
On 10 May 2017, the Russian Government announced a new program of state loan guarantees, targeting primarily the defense production sector. The guarantees cover loans and corporate bonds of the companies that finance projects in the framework of the "urgent tasks to ensure sustainable economic development". The said tasks are not formalized in either the present or related documents. The loans could be taken out to expand investments or even help pay the existing loans.
There are no restrictions on the size of the coverage under this program. The maximum amount of the guarantee is 70% of the loan amount for the defense productions and 50% of the amount for other companies. The guarantee is issued on the loans with maturity terms of 3-7 years.
The guaranteed is issued free of charge to the eligible companies.
Eligible project are selected by the Ministry of Industry and Trade and Ministry of Economic Development, with guarantees issued on a firm-by-firm basis.
The budget of this guarantee program is not known, as the Russian budget doesn't list such information. However, the total budget of the federal government's guarantee program is capped at 30 billion rubles (USD 522m). Therefore, despite lack of information on the program budget, the intervention can be assumed to have met the Global Trade Alert reporting conditions.