Russian rating agency ACRA assigned expected rating to the senior tranche of collateralized bonds to be issued by the SPV company - SFE TKB SME 1 LLC (the Issuer).
Senior tranche, which is going to be issued in this dynamic loan portfolio securitization transaction, achieved eAAA(ru.sf) by ACRA due to the credit support from the subordinated (junior) tranche and the satisfactory credit quality of the securitized portfolio.
The Issuer will issue ruble denominated fixed rate notes secured by the portfolio of loans granted by TRANSKAPITALBANK (TKB, the Bank) to small- and medium-sized enterprises. The expected volume of the senior tranche of the notes is RUB 5,748 million.
The structure of the deal propose that new loans may be included into the securitized portfolio in replacement of repaid loans within two years after the issue of the notes, subject to certain terms and conditions (so this transaction is a dynamic asset backed securitization). Loan receivables acquired by the Issuer will form part of the collateral for the notes. The main source of payments on the rated note will be repayments from the underlying borrowers.
Among significant factors determined the securitized portfolio ACRA mentioned long weighted average life of borrowers (11.5 years) and positive credit history for most borrowers: no loans in the securitized portfolio have been in arrears for more than 30 days since their origination, 97% of loans have never been in arrears.
This transaction is going to be the Bank’s first structured finance transaction that received an expected credit rating from ACRA and it will be the first issue of collateralized notes securitized by a portfolio of loans granted by the Bank to SMEs.