VTB and DOM.RF have completed the third securitization deal of the bank’s mortgage portfolio by issuing mortgage bonds guaranteed by DOM.RF in the amount of RUB 72.97bn. This is the first issue of mortgage-backed securities in the Russian market with a fixed repayment schedule.
The coupon rate for the securities is fixed at 9.5% per annum. The transaction issuer is DOM.RF Mortgage Agent LLC.
Andrey Suchkov, Head of Securitization at VTB Capital, said: "We continue to actively develop our business with DOM.RF to securitize the bank’s mortgage assets. We are confident that due to our new security being comprehensible, profitable and reliable, it will attract considerable market interest, including from among investors whose activity in mortgage-backed bonds market was previously hindered by the payment uncertainty related to early repayment factor."
Artem Fedorko, Deputy Head of DOM.RF, commented: “We see demand from the largest banks for DOM.RF’s securitization mechanism. Issuing mortgage bonds with the guarantee of DOM.RF allows banks to effectively manage interest risk and capital, issue more mortgage loans at lower rates. We are developing this instrument to make it as interesting as possible for originators and investors.”
In 2018, VTB and DOM.RF signed a memorandum to expand their cooperation on issuing mortgage-backed securities in the amount up to RUB 500bn. The current placement brings the total volume of jointly implemented mortgage securitization transactions to RUB 195.5bn.
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