Local securitization points the way ahead for emerging markets
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BANKING

Local securitization points the way ahead for emerging markets

The structured bonds business is changing in emerging markets. The rapid development of local capital markets means that the product’s future lies closer to home. Euromoney takes a closer look at some of the developing world’s more innovative securitization markets and deals.

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IN LATE MARCH, Russian Standard Bank undertook a groundbreaking transaction when it issued a €300-million consumer loan deal. Although not the first securitization of Russian domestic assets – that honour goes to Home Credit and Finance Bank for its consumer loans securitization last December – it was the biggest deal of its kind and, as such, attracted the attention of ABS investors as well as emerging market specialist funds.

The deal, which was lead managed by Barclays Capital, HVB and JPMorgan, and took more than six months to plan, attracted more than 40 investors, mostly from the UK but also from Germany, Austria and elsewhere in Europe.

The transaction was the first of three landmark securitizations from Russia in the last week of March – the others were from Alfa Bank and Russian Railways – and demonstrates the growing popularity of structured finance as a financing tool in Russia and more broadly in the emerging markets.

Across Asia, Latin America, the Middle East and emerging Europe, securitization is becoming one of the fastest growing forms of funding, largely for banks and other financial institutions.

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