FINLAND/RUSSIA - Finnish pensions provider Ilmarinen has signed a deal to part-fund property firm Sponda's aggressive Russian expansion strategy. 

Ilmarinen, which is also one of the top three non-state shareholders in the property firm, will provide a €50m seven-year credit facility. Sponda has also signed an agreement with Danske Bank for a €150m credit facility over the same period.

Apart from a 34% state shareholding, Sponda's other two largest shareholders are domestic pension providers - the Finnish state pension fund (0.63%) and Etera Mutual (0.38%).

The finance agreement is an anomaly in the credit crunch, not least because Sponda claims it struck terms equal to those it struck on financing in the much looser lending environment of last autumn.

Moreover, Sponda chief financial officer Robert Öhman told IPE Real Estate the pension fund had approached Sponda with the offer.

"They knew we were talking to banks about new financing and they came to us," he said, adding: "There's no practical difference between this and a bank loan. They're a lender like any other."

Although Sponda agreed the loan on "very similar" terms to a bank loan, Öhman said one advantage of borrowing from a shareholder is the diversification of leverage. "It has the advantage of broadening our lender base. It's a positive sign from that perspective," he said.

The financing will fund both the firm's Russian expansion and property development projects in the Finnish market.

Sponda plans to invest up to €400m -approximately 10%-20% of the company's balance sheet - in Russia by the end of 2009, from €77m at the end of 2007.

The firm opened a St Petersburg office in March last year before acquiring three office buildings and two landbanks designated for logistics complexes.

Sponda will use some of the finance to meet its investment target of €150m annually in domestic property development.

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