Promsvyazbank - Russia issued the following announcement on July 31.
The Specialized Financial Society "SFD PSB SME 2015" on July 30, 2018 repaid ahead of schedule the issue of bonds within the framework of the first securitization of small and medium business loans in Russia.
Issuance of bonds with collateral in the form of loans granted to SMEs (class "A" bonds) for a total of 7 billion rubles. was placed in autumn 2016 among market investors. The rate of the monthly coupon on "A" class bonds was set at 10.25% per annum. As part of the transaction, Promsvyazbank implemented new ways to protect investors, as well as a mechanism for replenishment of the loan portfolio during the revolving period.
The structure of the deal and the quality of the loan portfolio of SMEs pledged on bonds were confirmed by the international rating agency Moody's Investors Service - in June 2018, the bond rating was upgraded from Baa3 to Baa2. In 2017, Promsvyazbank received the EMEA Finance award for the best securitization transaction in Central and Eastern Europe.
Currently, the PSB project remains the only securitization of the SME portfolio in the Russian market. For Promsvyazbank, it became the second asset securitization: in 2013 the deal with the mortgage portfolio was closed.
"With the implementation of the SME-securitization transaction, we have gained invaluable experience in applying a new funding instrument - structural bonds secured by a portfolio of loans to small and medium-sized businesses." We consider the possibility of arranging similar issues under favorable liquidity conditions that help reduce the final rates for SME borrowers, Vice-President, Director of the Directorate of Small and Medium-Sized Business of Promsvyazbank Alexander Chernoshchekin - We hope that our experience will be useful to market participants
Original source can be found here.