TRANSKAPITALBANK (TKB)’s special purpose vehicle SFE TKB SME 1 LLC (the Issuer) placed an ABS notes amounting to RUB5,0bln on the Moscow Exchange. The SME Bank acted as the Lead Manager and an anchor investor for this deal.
The notes issued within this ABS deal are collateralized by TKB’s SME loan portfolio for the amount of RUB6,85bln. The expected duration of the bonds is more than 3-years. The coupon rate is fixed at 9,25% p.a.
Russian rating agency ACRA assigned AAA(ru.sf) rating to the senior tranche of these notes. This is the 1st SME ABS transaction in Russia bearing ACRA’s credit rating.
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.
The SME Bank’s CEO Dmitry Golovanov commented the following: «This kind of transactions is a good opportunity for the SME Bank to expand the volumes of SME lending by our partner banks thanks to not only preferential funding conditions, but also to the market investors. The new uniform standards for SME lending as well as the uniform rules for asset-backed securitizations recently adopted by the Central Bank of Russia, created the basement for broad utilization of the new refinancing instruments for SME borrowers. We shall proceed to move further within this business line and arrange ABS transactions for certain banks, including multi-origination platform for medium, small and primarily regional financial institutions».
«The demand for our bonds we noted on the market and the level of the assigned rating both confirm high quality of the TKB’s SME loan portfolio. The Bank is on firm ground in this business segment and is going to further develop SME lending. Among the important factors of our success we see our capability to be quick in business decisions and our skills for realization of non-typical SME projects. TKB has plans to continue with ABS transactions in different areas» - Evgeni Ivanovski, TKB Deputy CEO commented.