KIAP, Attorneys at Law has completed legal support of the off-balance securitisation transaction of a portfolio of residential mortgage loans of Bank VTB 24 through issuance of non-convertible interest-bearing documentary residential mortgage-backed class A and class B securities by CJSC “Mortgage Agent VTB 2013-1” to be fully redeemed on 4 September 2014. The total amount of the issuance was more than 28.9 bln roubles.
The class A mortgage-backed securities were placed at the Moscow Exchange on 28 January 2014. The class B mortgage-backed securities, subordinated to class A mortgage-backed securities, were placed OTC on 29 January 2014. VTB 24 acted as the originator, Ernst & Young (Moscow) was a tax counsel, and KIAP acted as an exclusive legal counsel on the transaction.
The firm has provided the overall legal support in developing certain structural elements of the transaction, in drafting the issuance and contractual documentation, in supporting disclosure by the Issuer, as well as issued the Russian law legal opinion. Moreover, KIAP has also interacted with the Moscow Exchange, National Clearing Depository (the NCD), the rating agency, and the Financial Markets Service of the Bank of Russia.
Moody’s has assigned Baa2 (sf) rating to the class A securities issued by CJSC “Mortgage Agent VTB 2013-1”.
In terms of issue size this is one of the largest Russian law securitisation transactions at the moment.
“The transaction is remarkable for the fact that it has been executed at the time when a new draft of Standards of issuance has come into force, that required extensive amendments to the issuance documentation to be made, and also affected the execution of the transaction at certain stages,” says Julia Osadchaya, partner and head of banking and finance at KIAP. “Specifically, relating to class A securities, there was a notice filing implemented for placement results as an alternative option to the placement report, that is a novelty in the law. Thus, the transaction was pioneering where the market players had a chance to practically test all the benefits and drawbacks of the legislative novels.”
The class A mortgage-backed securities were placed at the Moscow Exchange on 28 January 2014. The class B mortgage-backed securities, subordinated to class A mortgage-backed securities, were placed OTC on 29 January 2014. VTB 24 acted as the originator, Ernst & Young (Moscow) was a tax counsel, and KIAP acted as an exclusive legal counsel on the transaction.
The firm has provided the overall legal support in developing certain structural elements of the transaction, in drafting the issuance and contractual documentation, in supporting disclosure by the Issuer, as well as issued the Russian law legal opinion. Moreover, KIAP has also interacted with the Moscow Exchange, National Clearing Depository (the NCD), the rating agency, and the Financial Markets Service of the Bank of Russia.
Moody’s has assigned Baa2 (sf) rating to the class A securities issued by CJSC “Mortgage Agent VTB 2013-1”.
In terms of issue size this is one of the largest Russian law securitisation transactions at the moment.
“The transaction is remarkable for the fact that it has been executed at the time when a new draft of Standards of issuance has come into force, that required extensive amendments to the issuance documentation to be made, and also affected the execution of the transaction at certain stages,” says Julia Osadchaya, partner and head of banking and finance at KIAP. “Specifically, relating to class A securities, there was a notice filing implemented for placement results as an alternative option to the placement report, that is a novelty in the law. Thus, the transaction was pioneering where the market players had a chance to practically test all the benefits and drawbacks of the legislative novels.”