Two major rating agencies last week issued ratings on what could be Russia's first public RMBS. Vneshtorgbank (VTB) secured a split BBB+'/'A1' from Fitch Ratings and Moody's Investors Service, respectively, for $74.2 million in A notes, with a 28-year legal final.

Joint leads HSBC and Barclays Capital are expected to hold some low-key investor meetings during Information Management Network's Barcelona conference this week, but the roadshow will start in earnest only after the meeting, said a source close to the deal. Given that the deal is Reg S, the arrangers will focus on European investors, but might also sell to U.S. offshore accounts.

The transaction also includes $10.6 million in B notes with a 28-year final and respective ratings of BBB'/'Baa2', and $3.5 million in C notes with the same final and respective ratings of BB-'/ B2'.

Collateral consists of dollar-denominated loans secured on Russian residential property. Apart from the subordination, a non-amortizing cash reserve equaling 2.5% of the placement volume, and a liquidity facility up to 6% of the issue provide credit enhancement. The deal also has the International Finance Corp. on board, with the multilateral guaranteeing a liquidity that covers shortfalls stemming from capital controls imposed by the Russian government.

The senior notes pierce the Russian sovereign ceiling in the cases of both Fitch and Moody's.

The mortgage pool is secured by properties in the Moscow and St. Petersburg areas. VTB is the primary servicer and ZAO Raiffeisen is acting as backup servicer. The notes will be priced as floaters, while the rates on the underlying mortgages are fixed. To mitigate the resulting rate mismatch, Barclays Bank is providing an interest rate swap.

Meanwhile, another Russian RMBS is reportedly timed to price as soon as July. Citimortgage has a deal in the works via Greenwich Financial Services and MNB Capital Markets. While more details are out on the VTB deal, it remains to be seen which will earn the distinction of being Russia's first public RMBS.

Elsewhere in EEMEA, a $815 million deal for Turkiye Vakiflar Bankasi backed by diversified payment rights is expected to price around June 22 when bankers from leads Standard Chartered and WestLB are back from Barcelona (ASR, 06/05/2006).

(c) 2006 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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