2 October 2013
Moody’s Investors Service rating agency upgraded credit rating of tranche A mortgage-backed notes issued by Closed Joint Stock Company Mortgage Agent Vozrozhdenie 2 to Baa2. The notes were issued in the course of the deal on Bank Vozrozhdenie mortgages securitization in April 2013. Initially Moody’s Investors Service assigned the issue with investment grade rating Baa3 on the grounds of the bank’s mortgage book high quality.
Rating action on the notes reflects the revision of Moody’s key modelling assumptions used in rating Russian RMBS due to introduction of amendments to the Russian mortgage-backed security (MBS) law. The revised model does no longer incorporate the risk of issuer self-liquidation resulting from a negative net asset ratio. As of now the law prohibits the Mortgage Agent’s “voluntary” self-liquidation as long as issued bonds remain outstanding.
“Boosting retail lending with focus on mortgages is one of the bank’s strategic priorities. Securitization of mortgages remains the key financing tool for further enhancing this portfolio growth,” commented Evgeny Dmitriev, member of Bank Vozrozhdenie Management Board and head of the Retail Business department, and added, “As our next securitization deal is in a pipeline, we will benefit from such a change in the rating agency approach to assessing risks on Russian RMBS deals since it will trigger cheapening of the funding cost”.
The bank offers mortgages at the primary and secondary housing markets as well as finances purchases of houses with land.