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EBRD takes part in innovative capital markets deal securitizing Russian assets
Russian Standard Bank uses its consumer loan portfolio to raise funding
The European Bank for Reconstruction and Development has bought €8.5 million
of asset-backed securities in a complex and innovative deal that has enabled
Russian Standard Bank, a leader in consumer finance, to use a portion of its
consumer loan portfolio to raise short-term funding.
The EBRD purchase is part of a larger securitization deal under which Russian
Standard Bank sold the equivalent of €250 million of its consumer loan
portfolio to a Luxembourg-registered special purpose vehicle in a closed
transaction.
This latest pioneering deal involving Russian Standard Bank shows the market
how local borrowers can use their receivables to access sophisticated new
forms of financing that match their funding needs, said Jonathan Woollett,
director of non-banking financial institutions at the EBRD.
The funds raised from a range of investors who bought into these asset-backed
securities will enable Russian Standard Bank to expand its sales of consumer
finance loans through regional networks of leading retail chains with which it
has established a partnership.
In a separate transaction, the EBRD has just lend Russian Standard Bank the
rouble equivalent of $30 million to fund consumer lending in what is its
biggest growth area, the Russian regions outside Moscow.
The funding for Russian Standard Bank follows closely on another
ground-breaking EBRD transaction in Russia last month in which the Bank made
Russia’s first ever subordinated loan in local currency to Promsvyazbank.
The 1.5 billion roubles Promsvyazbank will receive through this six-year loan,
which can be extended for an additional four years, will count towards its
tier-2 capital. This strengthening of Promsvyazbank’s capital base will help
it launch a planned regional expansion and increase lending to small
businesses.
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