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EPAM Facilitates Mortgage Asset Securitization Transaction for Absolut Bank

EPAM Facilitates Mortgage Asset Securitization Transaction for Absolut Bank


Egorov Puginsky Afanasiev & Partners (EPAM) has advised on the fourth mortgage asset securitization transaction for Absolut Bank.

The transaction is one of the first single-tranche securitizations on Russia’s securities market, in which Mortgage Agent Absolut 4 purchased a mortgage loan portfolio from Absolut Bank, issuing a single tranche of mortgage-backed bonds with a coupon rate of 9.85% per annum and an aggregate principal amount of RUB 4.9 billion. This amounts to 81% of the company’s mortgage loan portfolio.

The remainder of the mortgage loan portfolio purchase price was financed via credit from Absolut Bank, with the obligations under the loan to be performed only subject to the performance of the issuer’s obligations under the bonds. According to EPAM, with the firm’s assistance, "the transaction was structured in a way that is unique for the Russian financial market, with provisions for the simultaneous and proportional repayment (amortization) of the issuer’s subordinated debt (loan from Absolut Bank) and the senior debt (the bonds), subject to certain conditions set out in the resolution to issue the bonds."

This marks the first time a bondholder representative has been appointed for a mortgage securitization transaction in Russia.

Moody’s assigned a Baa3 (sf) credit rating to the bonds. EPAM reports that the bonds, which were issued by Raiffeisen Bank, "were floated on the Moscow Exchange with significant oversubscription."

The EPAM team was led by Partner Dmitriy Glazounov, supported by Senior Associate Ilya Bareysha, Associates Nadezhda Morgunova and Vladimir Goglachev, and Junior Associate Dmitry Kabanov. The firm’s Tax Practice, led by head of practice Sergey Kalinin, provided advice on taxation issues.

Russian Knowledge Partner

Founded in 1993, Egorov Puginsky Afanasiev & Partners is the leading full-service law firm in the CIS with offices in Russia, Ukraine and Belarus and associated offices in the UK, the USA and Cyprus.

We advise its clients in many areas of law, including: dispute resolution in Russia and abroad, corporate law, M&A, antitrust issues, project finance and PPP, restructurings and insolvencies, energy and natural resources, property management and privatization, environment, technical regulation and industrial safety, banking and finance, intellectual property, criminal law, real estate and construction, taxation, family and labour disputes, marine and transport law, and international trade and customs.

We combine high academic qualifications, internationally acknowledged moral and ethical values, senior partners' professional experience and practical abilities with the vigour and knowledge of younger attorneys that enables thus providing clients with reliable, first-class service according to both Russian and western standards through a flexible structure.

All News about, and Legal Analysis by, Egorov Puginsky Afanasiev & Partners can be found here.

Firm's website: www.epam.ru


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