The problem is that Gazprom is no ordinary company: "I wonder whether the banks chasing these mandates actually understand how it works. It's a state within a state - and being Russian makes the process all the more complex. Any western bank that gets involved ought to expect trouble at some point down the line," says one banker.
The latest victims are ABN Amro and Goldman Sachs. They had agreed in April to extend Gazprom a $1 billion bridge loan as part of a package to win the mandate for $2 billion-worth of convertible bonds and a Eurobond later in the year. "We were to run the books on the convertible, and ABN on the Eurobond," says Glenn Earle, managing director at Goldman. "After this was agreed, Gazprom's management told us we would have the mandate if we could offer the bridging loan - and then gave us one week to decide."
Nothing unusual in that: Russian companies are increasingly tying debt mandates to bridging loans. And the bridging loan was to have been refinanced either by the $3 billion syndicated loan which Dresdner Kleinwort Benson and Crédit Lyonnais are planning for September or November or by bond issues.