Russian middle-tier bank Vozrozhdenie is in the local market with a ruble-denominated RMBS, the first time the issuer has tapped this market. Rated 'Ba3' by Moody's Investors Service, the bank itself is not controlled by the government, making it an anomaly in the current environment.

"This is the first RMBS from a standalone, not-government-related bank post-crisis," said Olga Gekht, a senior analyst at Moody's.

"It shows that this type of transaction is possible," she added. "There are a lot of banks in the middle tier that could be interested."

While others may indeed follow suit, it is unlikely that market investors will make much of an impact during the foreseeable future. "Only a few non-state-run pension funds are looking into MBS, so we cannot say that there's a revival of the market for [these] transactions in Russia," said Sergei Kaduk, head of debt capital markets at VEB Capital, the investment banking unit of government-owned Vnesheconombank (VEB), whose mandate is to promote development.

Also a gigantic pension bank, VEB has been funding much of the activity in the market. Up to 2014, it is allowed to fully purchase any tranches that are investment grade.

Slated to close in December, the Vozrozhdenie transaction is understood to be going to VEB's pension fund and AHML, a mortgage agency that's somewhat akin to Fannie Mae in Russia. The market post-crisis has been dominated by AHML, which also packages mortgages originated by correspondent banks, as well as other state-related lenders.

VTB Capital, the arranger, had not answered questions about the deal as of press time. At any rate, Kaduk said that there could be additional deals in 2012 by sub-investment- grade issuers that do not have government support. Nomos Bank and Bank Soyuz may be among the potential candidates, he added.

Bank Soyuz, rated 'B-' by Standard & Poor's, became, in 2005, the first Russian originator to issue an existing asset transaction. The $43.7 million deal was backed by auto loans. Nomos Bank, meanwhile, has the same 'Ba3' rating as Vozrozhdenie. Its mortgage book, however, is significantly smaller. While Vozrozhdenie had about RUR13.3 billion ($432 million) in loans as of July, the figure for Nomos was RUR6.8 billion.

The Vozrozhdenie transaction consists of an A and B tranche. The A piece totals RUR2.9 billion and is rated 'Baa2' by Moody's. The unrated B tranche is sized at RUR1.1 billion. The legal final maturity is a little under 33 years. There are 4,057 borrowers in the pool, and all are deemed prime. The collateral has a weighted average current LTV of 52.3%.

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