On December 19, 2014 OAO AK BARS BANK announced the successful closing of their inaugural securitization of mortgage assets. The legal support of the said transaction was ensured by the Banking&Finance and Capital Markets Practice team of Egorov Puginsky Afanasiev & Partners.
The transaction provided for offering by an SPV (mortgage agent) of three tranches of bonds secured by a pledge over a mortgage pool: two senior tranches rated Baa3 (sf) by Moody’s, and a junior tranche, where the obligations shall performed after those under the senior-tranche bonds have been discharged.
As directly assisted by the Firm’s lawyers, the senior-tranche bonds have been offered by private subscription to State Corporation “Bank for Development and Foreign Economic Affairs (Vnesheconombank), and the junior tranche has been offered by private subscription to OAO AK BARS BANK acting as the originating bank partially undertaking the transaction-related risks.
The key aspects and factors affecting the contractual documents’ content are
- the transaction being entered under Vnesheconombank’s Program for Investment into Affordable Housing Construction Projects and Mortgage;
- engaging of the Agency for Housing Mortgage to act as a facilitator;
- a non-standard procedure for senior-tranche bonds offering (exchange and off-exchange).
The transaction has been supported by Banking&Finance and Capital Markets Practice team at Egorov Puginsky Afanasiev & Partners, including Senior Associate Oleg Ushakov and Associate Alexander Filchukov, as supervised by Partner and the Practice Head Dmitriy Glazounov.