OREANDA-NEWS. AK BARS Bank OJSC, with the support of AHML, has successfully completed the securitization of part of its mortgage portfolio and placement of mortgage-backed bonds.

In the course of the transaction, the issuer, Mortgage Agent AK Bars CJSC, placed three classes of mortgage bonds ("A", "B", and "M"), totalling 2.5 billion roubles. Class "A" is 1.4 billion rubles, Class "B" is 696.7 million rubles, and Class "M" is 412.9 million rubles.

The Class "A" and "B" bonds are rated at Baa3 (sf) by Moody's Investors Service. The bonds were issued under the Vnesheconombank Program with the coupon rate for Class "A" bonds at 9% and for Class "B" bonds at 3%.

The final maturity date for all classes of bonds is May 10th, 2047.

VTB Capital was the arranger and VEB Capital was the underwriter of the transaction. AHML acted as the backup servicer.

Under the backup support contract, the AHML provided the mortgage agent with "cold" service. The acceptance term of the portfolio, upon the expiration of which AHML begins to provide a full range of primary mortgage services (including acceptance of credit histories, the transfer of borrowers' funds to accounts, litigations, etc.) is 90 calendar days.

Also, as part of the backup service, in order to ensure continuity of the issuer's operations, AHML has used the following options: "Account Management" and "Facilitator's Services." These services include management of bank accounts of a mortgage agent, as well as assistance to the issuer in the search and recruitment of a new management organization and/or accounting organization in case of insolvency or default of the current parties to the transaction. These functions are material for the transaction, as they reduce the security-related risks that may arise in connection with the insolvency of the management and/or accounting organization.

Currently the securitisation of accumulated mortgage portfolios remains an optimum source of funding for credit institutions. On our part we tried to be a future-oriented partner for our clients. Our services are constantly evolving and get new options, that allows additional enhancement of the backup service reliability and provide the highest possible rating of issued bonds. One of the largest banks of the Republic of Tatarstan expresses its trust to the work of AHML's team. Its choice proved the quality and reliability of our services, commented Iraida Shtyrova, director of the Department of Development and Infrastructure of Master Servicing, AHML.

We highly appreciate the results of securitisation deals on mortgage portfolio and thank the participants of the project - VTB Capital, VEB Capital, EPAM Law Firm; VTB specialized depository; rating agency Moody's Investors Service, PwC and AHML. The existence of formed qualitative credit portfolio, effective bank's team interaction with the partners are became the factors of the timeliness and success completion of the deal and the high volume of the senior tranche in 83,5% of the issue, commented Radik Salahutdinov, Deputy Chairman of the Executive Board of the AK BARS Bank.

Since the beginning of 2014 AHML has participated as a back-up service agent in 10 securitisation transactions totalling 43 billion roubles.