On 19 December, 2014 AK BARS Bank successfully closed its mortgage portfolio securitization deal within the issue of mortgage-backed bonds in the amount of RUB $2.5 bln. under the Programme of Vnesheconombank’s Investment in Affordable Housing Construction Projects and Mortgage Lending in 2010-2013.
Three classes of mortgage bonds («A», «B» and «M») were issued within the deal in the following amount: «A» tranche — RUB 1.4 bln., «B» — RUB 696.7 mln., «M» — RUB 412.9 mln. «A» class bonds coupon was set at 9%, «B» class — at 3%. The volume of senior tranches amounted to 83.5 % of the issue.
Among three bonds issues all maturing on 10 May 2047 «A» and «B» class bonds were both rated Baa3 by Moody`s Investors Service.
«VTB Capital» acted as the deal Arranger, «VEB Capital» was the project underwriter, the Agency for Housing Mortgage Lending acted as a back-up servicer, VTB Specialized Depository served as a specialist custodian.
Radik I. Salyahutdinov, the Deputy Chairman of the Management Board of AK BARS Bank commented: AK BARS Bank successfully implemented a pilot project on securitization of mortgage loans. It is coordinated teamwork, high quality loan portfolio, our partners’ expertise that allowed us to raise funds from new capital markets in a current severe economic environment. We hope that the experience gained will encourage us to actively implement securitization plans in the future.
Andrew Y. Suchkov, Head of Securitisation at VTB Capital, also commented on the deal: «The successful completion of AK BARS Bank’s transaction has clearly shown that securitization can be an effective mechanism for mortgages funding both during economic growth and stagnation. In the current difficult economic situation, the support of public development corporations, such as Vnesheconombank, is a prerequisite for the further development of the mortgage market in Russia».