VTB Capital has successfully completed the first single-tranche mortgage securitisation deal in Russia for Metallinvestbank in the amount of RUB 3,28 bln with a coupon of 10,25%. The placement allowed the bank to attract financing for further development of its mortgage business at an unprecedented level for banks with comparable credit ratings.
A number of innovative structural solutions were used in the issue, allowing to place the notes on attractive terms and securing solid demand from investors. One such feature was that the excess mortgage collateral, reserve funds and issuer’s expenses were funded by a loan from Metallinvestbank. This allowed VTB Capital to avoid issuing junior MBS notes, optimising the use of capital for the bank.
Another solution specific to the transaction was the price-based rather than coupon-based book-building process and placement of the notes, giving Metalllinvestbank an additional flexibility to adapt to a fast-changing market environment and investor demand. The yield at the time of the placement equated to an approximate spread of 145bps over the OFZ curve, which is unprecedentedly narrow for the Russian MBS market.
, Senior Vice-President at VTB Bank, Head of Securitisation at VTB Capital, said: “This deal is the first transaction of its kind in the Russian market. Its successful execution is testament to VTB Capital’s competitive advantage and innovative approach to structuring and placing mortgage-backed notes. The placement confirmed the viability of the Russian securitisation market and will undoubtedly serve as a benchmark for future deals.”
Credit support for the issued senior notes is provided by the AHM ҆s guarantee, the overcollateralization in the amount of over RUB 460 mln and reserve funds.
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