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| Russian Securitization Facility-1 |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 25375 |
| Company name | Russian Standard Bank |
| Country | Russian Federation |
| Sector | Finance & Insurance |
| Environmental category | C |
| Department | Global Financial Markets Group |
| Status | Active |
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| Date SPI disclosed | August 23, 2006 |
| Projected board date | October 5, 2006 |
| Previous Events | Invested: November 22, 2006
Signed: November 22, 2006
Approved: November 8, 2006 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The project comprises IFC’s first securitization facility of up to US$50 million in a series of asset-backed securitization transactions contemplated currently by the Russian financial institutions. The proposed project will be used as a credit enhancement to support two proposed cross-border securitizations planned by Russian Standard Bank (RSB or the Bank), a leading consumer finance bank in Russia. One transaction would involve the securitization of car loan assets and the other transaction would involve the securitization of RSB’s credit card receivables.
The proposed investment will represent an effort by IFC to support the development of the securitization market in Russia, which is an important ingredient in the continued growth of the private banking sector of Russia. In addition to the funding mobilization, IFC’s securitization facility will also aid in the development of the financial markets in Russia through:
- increased adoption of “best practice” credit scoring techniques,
- increased disclosure and transparency required by rating agencies and capital markets investors, and
- the dissemination of state-of-the-art financial engineering techniques.
The transaction builds on IFC’s existing successful investments in RSB and will help RSB to mobilize funding, while limiting direct IFC’s funding to the Bank, and on the experience in supporting two other Russian securitizations earlier in 2006. |
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| Project sponsor and major shareholders of project company |
| RSB is part of the Roust Group of companies owned and controlled by Roustam Tariko, a successful local entrepreneur. RSB is a closed joint-stock company directly owned by Russian Standard Company and Roust Inc., both of which are indirectly controlled by Mr. Tariko through a holding company. |
| Total project cost and amount and nature of IFC's investment |
| It is proposed that IFC will provide credit enhancement of about $50 million. |
| Location of project and description of site |
| RSB is headquartered in Moscow, Russia and operates through offices across many Russian cities. IFC’s investment will be used by RSB for on-lending to consumers in the Russian market. |
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| Anticipated development impact of the project |
The project will help to increase depth of the Russian capital as being structured with the senior notes of an investment grade level.
The securitization transactions will enable RSB to raise long term funding.
The requirement to utilize international rating agency standards for structuring and servicing the transactions will help to promote the use of “best practice” credit assessment tools and increase transparency and disclosure. |
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| IFC's expected development contribution |
- To support an innovative transaction that would help demonstrate the viability of well-structured securitizations by Russian banks;
- To promote the adoption of capital market standards by a Russian financial institution, including the use of ratings and increasing the level of transparency and disclosure;
- To provide much needed credit enhancement support that is crucial to enable the project to achieve targeted credit ratings and eventual placement of the notes; and
- To leverage IFC’s experience in structured finance transactions in emerging markets to assist an existing portfolio client to complete a successful securitization. |
| Environmental and social issues - Category C |
| Considering that the project entails support to the securitization of retail financing, the project is Category C project according to IFC’s environmental and social review procedure. No further environmental or social analysis is required. |
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| For inquiries about the project, contact: |
Russian Standard Bank
2/1, bld. 6, Spartakovskaya str.
105066 Moscow, Russia
E-mail: ir@bank.rs.ru
Telephone: +7 495 797 8402
Fax: +7 495 797 8440 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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