Russia-based MDM Bank priced a $350 million diversified payment rights (DPR) deal last week via Dresdner Kleinwort.

The 144A, Reg S deal was upsized from an original $250 million and had a five-year final, 2.6-year average life maturity. Pricing on the transaction was 200 basis points over three-month Libor. The transaction was originally rated Baa3' by Moody's Investors Service, but was upgraded to Baa2' when the agency announced an upgrade of a number of Russian banks earlier this month. MDM's foreign currency senior unsecured debt rating was bumped up to Ba1'- the highest notch of sub-investment-grade status - from Ba2.'

The deal marks MDM's second DPR; its first was a $498 million equivalent deal in November, which was done under Reg S, but not a 144A.

This spring has been fairly busy on the Eastern European DPR scene. Kazakhstan's Bank TuranAlem broke into the DPR market via Standard Chartered, and Kazkommertsbank, also from Kazakhstan, brought a $500 million deal via Merrill Lynch and West LB. Russia's Alfa Bank has issued multiple DPRs, with its most recent one launched in March via Dresdner and Merrill, and Turkey's Yapi ve Kredi priced a deal via Standard Chartered and HypoVereinsbank.

As of Oct. 1, 2006, MDM ranked 11th among Russian banks in terms of total assets, and 36th in terms of retail deposits, according to a Moody's report. The bank was one of the few Russian banks to emerge from the 1998 financial crisis relatively unscathed, and was also one of the few to honor its foreign obligations during and after the crisis, the report says.

(c) 2007 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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