The Banking & Finance, Capital Markets team at EPAM has successfully completed the legal support of two transactions to securitise the mortgage assets of the Housing Finance Bank (ZAO Bank ZhilFinance).

Each transaction involved placement of three classes of subordinated bonds by special purpose vehicles (mortgage agents). The senior tranche was placed by public offering, middle (mezzanine) tranche was placed for the benefit of the Agency for Housing Mortgage Lending OJSC (AHML), and the equity tranches for the benefit of ZAO Bank ZhilFinance, acting as the originating bank partially assuming the transaction risks.

Our team assisted the successful implementation of a non-standard task, i.e. introduction of the middle tranche into the deal structure, which contributed to mitigation of the risk assumed by the originating bank and allowed to increase the number of senior tranche bonds placed. Other specifics of the deal affecting the contents of the contractual and emission documents include depository accounting of the mortgage bonds constituting the mortgage coverage (property  pledged on bonds), as well as monthly bond coupons. 

“The successful completion of the transaction is an important step in implementing the bank's strategy, aimed at increasing pools of mortgages issued, refinanced and served by the bank”, says Ruslan Iseev, Chairman of the Management Board at ZAO Bank ZhilFinance.

Associates of the Banking & Finance, Capital Markets at EPAM, including Senior Associate Oleg Ushakov and Associate Vladimir Goglachev supervised by Partner and Head of the Practice Dmitry Glazunov, worked on the project.