The Russian securitization market has flickered in to life with a E300 million ($357 million) consumer loans asset-backed security and a $300 million diversified payments rights deal--the first public-offered DPR deal there.
Russian Standard Bank ZAO launched the consumer loan asset-backed deal that aims to get around some of the difficulties in swapping Russian rubles to euros.HVB is placing the notes. Local bank ABS portfolios range in size from $50-100 million, with the small, short-term loans funding purchases such as fridges and televisions. Between year-end 2004 and year-end 2005, retail sales grew a whopping 161%. Chris Such, an analyst at Standard & Poor’s, said that a key driver behind this growth is the number of banks. “Banks have grown over the past six years and lending is growing. Interest rates have dropped so people are more used to personal, unsecured loans,” he said. The offering is being issued through a Luxembourg SPV, using English tax laws. Officials at Russian Standard Bank could not be contacted at press time.
Alfa Bank is doing the diversified payments rights transaction, with Merrill Lynch and Dresdner Bank managing the deal. A market analyst said the deal is rated Ba2. “It’s not a balance sheet transaction,” he said. “It’s purely funding.”