On December 17, 2014 URALSIB OJSC announced the successful closing of another securitization of mortgage assets. The legal support of the said transaction, as well as of the two previous ones, 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 URALSIB OJSC 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;
- 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 Nadezhda Morgunova, as supervised by Partner and the Practice Head Dmitriy Glazounov.
“This is the third mortgage assets securitization done by our Practice team for URALSIB OJSC. The high rating of the senior-tranche bonds has been particularly ensured through application of the legislative innovations. Thus, for example, most transactional documents have secured the principle of non-petition protecting a mortgage agent from insolvency,” says Dmitriy Glazounov.