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.

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

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