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IFC Provides Credit Enhancement to ROOF Russia S.A., for Securitization of Auto Loans


Washington, DC:
Irina Likhachova

Phone: +1 (202) 458-8967

Email:
ilikhachova@ifc.org


Washington DC, May 31, 2007 -- IFC, the private sector arm of the World Bank Group, has provided credit enhancement for the first public securitization by ZAO Raiffeisenbank Austria, the Russian subsidiary of Raiffeisen International.  This securitization of auto loans will support lending growth in the Russia’s consumer sector.

The securitization in the amount of $400 million, originated by ZAO Raiffeisenbank Austria, was placed successfully with international investors on May 16, 2007. IFC supported the issuance through its purchase of $12 million of the mezzanine Class C notes.


The transaction, lead managed by JPMorgan and Raiffeisen Zentralbank  (RZB), marks Russian Raiffeisenbank’s entry into the international asset-backed securities market. The auto loans originated by Raiffeisenbank were sold to a special-purpose entity named ROOF Russia S.A., which issued floating-rate term notes and senior variable funding certificates that were purchased by two commercial paper conduits and were backed by the auto loan collateral.  The use of both commercial paper and term note funding for the SPV was a notable innovation of the transaction.  The term notes were tranched into several classes with ratings by Fitch and Moody’s Investor Service ranging from A-/A3 to B/B2.


Including the current transaction, IFC has supported Russian entities’ access to the asset-backed securitization market through participations in four securitizations across several asset types, including auto loans, consumer loans, and residential mortgages.


Jerome Sooklal, IFC Director for Central and Eastern Europe, said, “Given that the consumer loan portfolio of Raiffeisenbank is expected to increase substantially after the merger with Impexbank, this transaction is expected to support lending growth in the consumer sector and in the regions.”


Jyrki Koskelo, IFC Director for Global Financial Markets, added, “One of the elements of IFC’s financial markets strategy in Russia is to develop the securitization market.  Raiffeisenbank is a first-time originator in Russia.  This transaction provides it with an alternative funding mechanism to meet the high demand for consumer finance in Russia and deepens the development of the Russian asset-backed securities market.”


Patrick Butler, Member of the Managing Board of Raiffeisen Zentralbank Österreich responsible for treasury and investment banking, said, “The deal marks one of the largest asset-backed securities transactions in Russia.  The asset quality, rating, and pricing structure have clearly given this transaction benchmark status.” Martin Grüell, CFO of Raiffeisen International, adds, "We actively manage our risk exposure to retail clients in the region. Our ability to place certain portfolio risks to specialized investors participating in the transaction allows us to further improve the effectiveness of our lending strategy. We appreciate IFC’s support in this structured finance transaction."


About IFC

IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries.  IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit
www.ifc.org.

IFC in Russia

Russia became a member and a shareholder of IFC in 1993.  Since then IFC has invested $3.4 billion in the country, including $527 million in syndicated loans, in over 130 projects across a variety of sectors.  In FY06, IFC’s investments reached $519 million.  IFC’s investment portfolio in Russia stands at $2 billion, making it the largest country exposure for IFC globally.  IFC has invested in key sectors, including agribusiness, banking, construction materials, health care, housing finance, information technologies, infrastructure, leasing, mining, oil and gas, pulp and paper, retail, and telecommunications.  For more information, visit
www.ifc.org/europe.