Russia's MDM Bank priced, last week, a $403 million transaction backed by auto loans under the name Takanga Car Loan Finance. The leads were Dresdner Kleinwort Wasserstein and Merrill Lynch. A $270.9 million A piece with an average life of 0.92 years and ratings of Baa1' and A-' from Moody's Investors Service and Standard & Poor's, respectively, priced at 100 basis points over one month Libor. A $77.4 B piece with an average life of 2.32 years and ratings of Baa2'/'BBB' priced at 160 basis points over. And a $54.8 million C piece with an average life of 3.28 years and ratings of Ba2'/'BB' came out at 330 basis points over. The legal final for all pieces is 2013. The results were spot on with pricing guidance for the A and B tranches and a tad tighter for the C tranche.
The deal was the second securitization of auto loans from Russia; Bank Soyuz placed the first more than a year ago. Collateral for Takanga consists of U.S. dollar- and ruble-denominated loans. Russian Standard Bank - which has its own auto loan deal down the pike (see story above) - is the backup servicer. For most of the Taganka's life, the structure benefits from a balance guaranteed swap. But that hedge expires on the scheduled maturity date in 2011, exposing cash flows thereafter to fluctuations in the exchange rate.