By dint of geography, London-based bankers are naturally dominating the Russian RMBS game, but not all players on this side of the pond are content to watch. Connecticut-based Greenwich Financial Services, which has one Russian RMBS under its belt, has paired up with Washington's Overseas Private Investment Corp. (OPIC) to create a multiseller warehousing facility.

OPIC announced last week that it would give $200 million to the vehicle, which has been set up by Greenwich. The facility could crank out upward of $1 billion in RMBS, OPIC said in a press release. A source familiar with the transaction said that, annually, issuance could far exceed the $1 billion.

Greenwich will hand the reins of the facility's management to a different entity it has established, the Russian American Mortgage Co. (RAM). The facility will be multiseller, and one of its goals will be to build a liquid secondary market for Russian RMBS.

OPIC will be involved in the due diligence of selecting which banks are eligible to sell their loans to the facility. The RMBS coming off the facility, however, will be structured by any number of investment banks. The source said that a few big-name firms active in the region have already shown interest.

Team up with AHML

While its mandate is to work with a large range of Russian banks, the facility is expected to close its first transaction with mortgages collected by the Federal Agency for Home Mortgage Lending (AHML), Russia's quasi-Fannie Mae, according to the source.

It is widely known that working with the AHML is not a walk in the park. Citigroup, for instance, is understood to have had a mandate to structure AHML mortgages for well over a year, but not a single deal appears to be in the works. A Citi official did not return a call for comment.

A source at a rival bank said that its gigantic size makes AHML the nut that every banker involved in Russian RMBS would like to crack. One of the main obstacles to breaking through is the Byzantine system of regional AHMLs. "Each region has its own AHML; it's all over the map," he said.

Multiple-seller deals have been issued before from Russia. Last year, Gazprombank placed both a cross-border deal and a domestic transaction backed by mortgages from a variety of local regional banks and nonbank entities.

But while a number of banks in Russia are growing their mortgage portfolios at breakneck speed, no one holds a candle to AHML's sheer size. The agency had a portfolio of RUR24.5 billion ($951 million) by September 2006, having purchased loans from 253 banks in 89 regions of Russia, according to a recent report by Merrill Lynch. The agency estimated that it had refinanced 18% of the primary mortgage market in the first half of last year.

RAM's vehicle could issue RMBS in dollars, rubles or euros and deals will be Reg S and 144A registered, said the source close to the deal. Baker & McKenzie and Allen & Overy acted as legal counsel for the facility.

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

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