Rus Mortgage Sec

completed

_x000C_The project involves providing support to the first mortgage-backed securitization in the Russian Federation, where the development of a market-based refinancing mechanism is critical to the development of a sustainable mortgage finance cycle. IFC is considering providing support to the issue of mortgage-backed securities (MBS) to international investors. Under the proposed arrangement, IFC will provide credit support to the issuance of senior notes to allow the senior notes to receive an appropriate international rating. The mortgage pool to be securitized is comprised of residential mortgages. The residential mortgages will be sold to a special purpose vehicle (“SPV”) which will issue debt instruments that investors may purchase, and IFC’s credit support would be in favor of the owners of these senior debt instruments. The owners of these debt instruments would own the rights to the principal and interest payments made under the residential mortgage agreements, and IFC’s credit risk will depend on the underlying mortgages. The project will contribute to development of a secondary mortgage market generally and MBS market development in Russia more specifically based on proven origination standards. The structure of the transaction is designed to be replicable, and may offer a useful template for use by other originators and arrangers for subsequent transactions. Since the Russian legal basis for securitization is also being developed, this project may also influence the domestic securitization market by establishing a market standard for MBS transactions and increased transparency.