EEMEA innovation of the year: HCFB €291 million securitization
Russian deal draws on parent’s experience in eastern and central Europe.
|At a glance:
Deal type: Home Credit and Finance Bank debut securitization
Size: €291 million
Banks: HVB Group, (structurer, arranger and lead manager of Class A-1 notes) PPF Banka (manager for Class A-2 and Class B notes)
Date: December 2005
Securitization is a relatively new asset class for the Russian market. Although several deals that were sold last year could claim unique features, Home Credit and Finance Bank’s €291 million securitization stands out.
Although the deal is HCFB’s first secured bond, the bank had plenty of experience from its parent company to fall back on. HCFB is part of the Czech Republic’s PPF Group, which owns consumer credit providers across central and eastern Europe. In 2003, its Czech operation, Home Credit, brought what is believed to be the first ever ABS deal of domestic receivables from central and eastern Europe.
The HCFB securitization is the first deal rated in Russia by Moody’s, on the basis of timely payment of interest and ultimate repayment of principal, and the first to use FX hedging technology to enable euro investment into rouble assets. The Class A-2 notes were structured especially to mitigate commingling risk, and back-up servicing is dealt with in line with western standards.