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.
The Group’s assets stand at RUB 247bln, so there have been no significant changes in comparison with the beginning of 2018.
Total equity exceeds RUB 15,9bln (influence of the new provision for Expected Credit Losses resulting from the adoption by the Group of IFRS 9 comprised RUB 5,1bln) over RUB 20,1bln as of 31 December 2017.
Net interest margin increased for 6% up to RUB 3,4bln. Net fee and commission income reached RUB 810mln. Customer accounts increased up to RUB 146,6bln.
Loans and advances to customers is in excess of RUB 139,5 bln less provisions. The main part of the credit portfolio represents loans to corporate clients in the amount of RUB 89,3bln. The volume of the loans to individuals reached more than RUB 50,2bln and composed mostly of mortgages.
TKB Bank granted a bilateral trade-related loan to Khan Bank, Mongolia which is backed by stand-by letter of credit issued by the Asian Development Bank (ADB) within ADB’s Trade Finance Program (TFP). This is the first TF transaction TKB entered with ADB under their TFP program and TKB welcomes cooperation with the well-recognized reputable multirateral financial institution. The respective Confirming Bank Agreement (CBA) between ADB and TKB was executed on 09th of November, 2017. TKB is the first Russian bank which realized such transaction within TFP of ADB.
Via the TFP ADB provides support to the international trade development in Asia Pacific, South Caucasus and Central Asia. ADB’s TFP works with more than 240 financial institutions from different countries. The volume of trade transactions supported by the ADB’s TFP reached more than US$30bln for the period of 2009 – 2017.
Joining the group of ADB’s TFP Confirming Banks will help TKB Bank to expand cooperation with financial institutions across ADB’s countries of operations, including the CIS and EEU (Eurasian Economic Union) regions, to which TKB gives high priority.
On 20 April 2018 TRANSKAPITALBANK launched an invitation to eligible holders of the outstanding U.S.$100,000,000 10.00 per cent. loan participation notes due 2020 issued by TransRegionalCapital Designated Activity Company to tender their notes for purchase by the Bank for cash.
TRANSKAPITALBANK announced the targeted tender amount up to U.S.$25 million. The transaction successfully reached the expectations in terms of quantity and resulted in the aggregate nominal amount of notes equal to U.S.$23,849,000 that has been validly tendered in the tender offer.
The tender offer expired at 4:00 p.m. (London time) on 7 May 2018. All the notes validly tendered for purchase have been accepted in full without pro-ration.
The settlements were made through Euroclear / Clearstream on 10 May 2018.
The tender offer was managed by CITIGROUP GLOBAL MARKETS LIMITED as Dealer Manager and CITIBANK N.A., London Branch as Tender Agent.
TKB’s profitability is still driven mainly by the net interest income, which exceeded RUB 2,8bln. and which comprises 77% of the total operational income.
The Group’s total assets stand at RUB 220,4bln. Loans and advances to customers amounted over RUB 143,5 bln. Customer accounts reached 64% stake in the Group’s liabilities structure.
Since 01 January 2018 when the new IFRS 9 standard “Financial Instruments” has become mandatory for the banks in Russia and the regulatory requirements to the calculation of impairment ratios have been made more rigorous, the Group continues to report quite high level of the total capital adequacy ratio, which comprised 12,8% as of the end of 1Q 2018.