Home Credit & Finance Bank announces successful closing of the first securitization transaction of its consumer loan portfolio in Russia
Moscow, 12/09/2005
Home Credit & Finance Bank (Moody's Ba3/NP/D-, S&P B-/C), one of the leading providers of consumer credit in Russia, has today announced the successful closing of an asset-backed transaction for a part of its Rouble-denominated consumer loan portfolio (the "Securitization").The Securitization transaction was structured and arranged by HVB Group, a member of the UniCredit
Group. HVB Group also acted as the Lead Manager for Class A-1 notes with, PPF banka acting as the
Manager for Class A-2 and Class B notes. The securitization funding comes in the form of Euro
denominated notes issued by Eurasia Structured Finance No.1, SA and listed on the Irish Stock Exchange.
Moody's Investors Service assigned a senior Class A-1 notes rating of Baa2, senior Class A-2 notes rating of
Ba2 and a mezzanine Class B notes rating of Ba3. Moody's ratings assigned to the different classes of
Notes address the expected loss posed to investors by the legal final maturity. In Moody's opinion, the
structure allows for timely payment of interest and ultimate repayment of principal (making it the first Russian
asset-backed transaction where Moody's has been prepared to offer this opinion).
"We are happy to announce this landmark transaction for HCFB, and for the Russian as well as other CEE
markets. Some features of this transaction are unique and innovative in terms of both the Russian and the
international capital markets context, and reflect HVB Group's vast experience in the European ABS market.
The transaction provides us with the opportunity to draw down more funds during the Christmas season on a
flexible basis. In meeting the needs of our investors, we created a special Class A-2 notes to mitigate the
unique risks related to investing in this asset class," comments Dmitri Mosolov, the Deputy Chairman of
HCFB Management Board.
The transaction is structured into two phases: an initial issue amount of EUR126.5 million, followed by a
delayed issue amount of EUR164.5 million to be placed during the nine months from closing. Once the full
issuance is completed, senior Class A-1 and Class A-2 notes are expected to amount to approximately
EUR263 million, and mezzanine Class B notes to approximately EUR28 million. The transaction is arranged
to finance a total amount of over RUR10 billion of the bank's assets at a competitive rate, using a structure
which can be scaled and repeated for other asset classes that HCFB may originate in the future.
"The securitization for HCFB represents a milestone transaction - of significant interest to the Russian
market and all emerging-market financing specialists. This is the first substantial Russian ABS deal and HVB
has worked hard to meet HCFB's requirements in terms of the structure, flexibility and liquidity. It is also the
first securitization of domestic Rouble assets relying upon the innovative and new FX hedging technology
introduced to manage the basis risk between Rouble and Euro," comments Tim Nicolle, Director,
Securitization at HVB Group in London.
12/09/2005 - Author: - ends
