Russia's first auto-loan ABS priced last week, paving the way for the securitization of more onshore assets from this once forbidding terrain. Sized at $43.7 million, a five-year senior tranche priced at 175 basis points over one-month Libor, according to a source close to the deal. Boutique shop Greenwich Financial Services and Moscow Narodny Bank led the deal. Bank Soyuz is the originator. Moody's Investors Service rated the senior piece Baa3'.

The size of that tranche came below an initial projection of roughly $55 million because the estimate was based on the size of the loan pool at March 31.

Over 10 investors bought in, with Asia accounting for 45%, northern Europe snapping up 30%, southern Europe buying 10%, and offshore US accounts purchasing the remaining 15%. Solely registered as a Reg S deal, the transaction was off limits to onshore US investors. As for investor type, commercial banks took the lion's share, 65%, while funds bought 25% and insurance companies picked up 10%. The leads were understood to have made a concerted effort to ensure the broadest distribution possible, the source said.

Among the comparables available to investors for this first-time ABS was a 2007 floater issued by Vneshtorgbank, Russia's second largest. That bond is rated a higher a Baa2' by Moody's and is trading at about 76 basis points over Libor, according to the source. Investors also looked at subordinated tranches in U.S. credit card deals in the Baa1' area.

The entire allocation of the public A tranche went to the A-1 piece, which was capped at 8.75%. The uncapped A-2 piece invited little interest, because it would have come at a tighter spread. "There was a trade off between spread and cap and investors opted for the spread," the source said. Most floaters in the European market come without a cap.

Apart from the A piece, the deal featured a $4.0 million B tranche and $2.0 million equity tranche.

Down the Russian pike are two transactions backed by diversified payment rights, the first from this country. Vneshtorgbank has one in the works, led by Deutsche Bank Securities and Dresdner Kleinwort Wasserstein, while AlfaBank had mandated Dresdner and Merrill Lynch to structure its own DPR deal.

The EEMEA region is naturally expected to be quiet during August, when much of Europe is on holiday.

(c) 2005 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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