On December 08, 2014, Khanty-Mansi Bank Otkrytie PJSC announced that it had successfully closed a second deal on the securitization of the mortgage portfolio supported by the EPAM’ Banking and Finance, Capital Markets team.
The deal provided for offering by an SPV (mortgage agent) of three tranches of bonds secured by a pledge over a mortgage pool: two senior tranches, where the issuer’s obligations are performed in the same priority ranking, and a junior tranche, where obligations are performed once those under the senior-tranche bond were discharged.
The Firm’s associates contributed to Moody’s assigning a rating of Baa3 (sf) to the senior-tranche bonds, moreover the securities have been successfully listed on MICEX-RTS on the third tier of the List of Securities and have been offered for private subscription. The junior tranche has been bought back by Khanty-Mansi Bank Otkrytie PJSC acting as the Originator, thus taking on the deal-related risks.
The deal had the following features which impacted the content of the contractual documentation:
- the deal was made under the Vnesheconombank Program of Investments to Construction of Affordable Housing and Mortgaging in 2010-2013;
- the revolving mortgage pool was pledged to secure the issued mortgage-backed bonds. There is an option to acquire additional mortgages and add them to the mortgage pool out of the proceeds from sale of some of the pool mortgages in which certain legal defects were found.
- registered book-entry bonds were issued as part of the junior tranche with a premium to their nominal value.
EPAM’ Banking and Finance, Capital Markets team engaged on the matter included Senior Associate Oleg Ushakov and Associate Maria Sizova supervised by the Practice Head, Partner Dmitry Glazounov.
