VEB.RF’s Chairman Igor Shuvalov and Ulyanovsk Region’s Governor Sergey Morozov Discuss Promising Projects
VEB.RF’s Chairman Igor Shuvalov and the Ulyanovsk Region’s Governor Sergey Morozov met in Moscow to discuss cooperation prospects.
Igor Shuvalov spoke about VEB.RF’s capability to implement new projects in the region in partnership with other federal development institutions: Russian Small and Medium Business Corporation, DOM.RF and Russian Export Center.
VEB.RF’s Chairman suggested that the development institutions should set up a business mission in the Ulyanovsk Region to examine the region’s investment potential and select promising projects that are in the focus of participants’ attention.
“The Ulyanovsk Region has a favourable investment climate; its economy is growing. VEB.RF is willing to support new industrial projects. You are good partners, and we are ready to work with you,” Igor Shuvalov said.
The parties also agreed on a pilot project to establish liaison between federal and regional development institutions to promote investment projects and strategic initiatives. Ulyanovsk Region Development Corporation, together with other regional institutions, will also be involved in this process. Such a form of cooperation may then be replicated in other Russian regions.
Joint support for high-technology projects and digital infrastructure development is another promising area of cooperation. Ulyanovsk has become a pioneer in this initiative by participating in a technology transfer venture fund to be established by VEB Innovations.
In the Ulyanovsk Region, VEB backed a project to set up an industrial production facility for composite components and machinery. The facility is in commercial operation, with various research and development work presently under way.
Currently, VEB.RF Group has a number of urban economy projects under consideration, including renewing the local bus fleet, leasing municipal equipment, and constructing heat supply and water treatment facilities in Ulyanovsk.
VEB.RF issued short-term bonds in an additional placement to companies and corporations on 23 January 2019.
The Bank raised 13.225 billion roubles from bonds with a maturity of 14 days and a coupon of 7.65% p.a.
The par value of one bond is 1,000 roubles.
The bonds were sold at 100% of their par value.
The coupon is payable at maturity.
The arrangers of the bond issue are Gazprombank and Svyaz-Bank.
The bonds are on the Moscow Exchange’s Quotation List Level 1.
The depository is National Settlement Depository.
On 22 January 2019, SME Bank told the major financial news media about a pilot transaction of SME loan securitisation at the Moscow Exchange office.
The press briefing was attended by Chairman of State Development Corporation VEB.RF Igor Shuvalov, General Director of RSMB Corporation Alexander Braverman, Head of the Service for Protection of Financial Services Consumers and Minority Shareholders of the Bank of Russia Mikhail Mamuta, Member of the MOEX Executive Board Anna Kuznetsova, World Bank Country Director and Resident Representative for the Russian Federation Andras Horvai, Chairman of the SME Bank Board Dmitry Golovanov, other parties to the securitisation transaction, and market experts.
“We view the transaction as evidence that the Russian financial market is evolving and that banks’ attitude to small and medium-sized businesses is changing. It will allow us to leverage the resources allocated for financial support. The subsequent issues of such bonds should be structured in such a way as to accommodate the needs of the municipal economy because it is exactly small and medium-sized businesses that can change the quality of life in municipalities,” Igor Shuvalov said.
The briefing was designed to present the first transaction of multi-originator securitisation for a portfolio of loans extended to small and medium-sized enterprises. The transaction is intended to fine-tune two support mechanisms that are new to SME market participants: pooling multi-originator SME loans into a single portfolio and issuing RSMB Corporation’s guarantees for senior tranche bonds.
Chairman of the SME Bank Board Dmitry Golovanov emphasised the role of securitisation as a market mechanism to promote SME lending and enhance the accessibility and affordability of financing for Russian SMEs.
“This transaction is secured not only with RSMB Corporation’s guarantee. It involves many investors whose risks are covered by the current cash flow generated by SME loans,” Dmitry Golovanov said. “Today, we have opened the door to private investors’ and bankers’ raising funds in the stock market to finance SMEs. We expect to have a minimum of RUB10 billion in securitisations in 2019.”
Furthermore, the expert participants discussed more affordable financing for SMEs, greater credit support for SMEs through capital market instruments, and the role of public institutions in promoting securitisation market development. They also dealt with bond listing in the Growth Sector of the Moscow Exchange, factors in making securities attractive to market investors, and other ways to boost SME lending.
Alexander Braverman, Director General of RSMB Corporation, said: “We view this transaction as crucial to fostering financial market development and implementing a national project, SMEs and Individual Entrepreneurial Initiative Support. The securitisation mechanism provides SMEs with a fundamentally new environment. RSMB Corporation’s guarantee substantially improved the terms and conditions of the transaction. Generally, such transactions generate strong interest in the market, and we intend to work on enhancing this instrument in the future.”
The loan securitisation mechanism, enabling credit institutions to borrow by issuing bonds collateralised with SME loan portfolios, was introduced under the SMEs and Individual Entrepreneurial Initiative Support national project.
The bond issue totalled RUB7 billion with a coupon of 9.1% p.a. The arrangers of the issue are Promsvyazbank, VTB Capital, VEB.RF, Sovcombank, Eurasian Development Bank, Region Group of Companies and SME Bank. The investors include international development banks, Russia’s leading public and private commercial banks and financial companies. The SME loans included in the collateral meet the Uniform SME Lending Standards, while the structure and details of the bond issuance are in conformity with the Uniform Securitisation Mechanisms for SME Loan Portfolios as approved by the Bank of Russia’s Task Force in 2017 and 2018.
SME Bank will use the proceeds from the bond issue to increase lending to small and medium-sized enterprises next year as part of its core business.
“SME loan securitisation is to become one of the most powerful tools to raise funds for SME lending. With a portfolio of loans granted by different banks, it will also provide SMEs with additional guarantee support,” Dmitry Golovanov said to the journalists.
State Development Corporation VEB.RF closed the order book for VEB.RF’s PBO-001P-13 exchange-traded bonds on 18 January 2019. Under the programme of exchange-traded bonds, investors were offered bonds with a total par value of at least 5 billion roubles and with a term to maturity of five years.
Investors placed a total of 21 orders, and the overall demand for the PBO-001P-13 exchange-traded bonds reached 11.2 billion roubles, which was substantially higher than initially offered to investors.
The order book for the PBO-001P-13 exchange-traded bonds was opened
on 18 January 2019, initially with a coupon rate of up to 9.18 per cent per annum. When the order book was closed, the coupon rate was lower than the marketed level at 9.08 per cent per annum. The bond issue totalled 10 billion roubles.
The PBO-001P-13 bonds will be listed on the Moscow Exchange as from 25 January 2019.
Securities depository: National Settlement Depository.
Bookrunner: BC REGION.
VEB.RF issued short-term bonds in an additional placement to companies and corporations on 18 December 2019.
The Bank raised 2.278 billion roubles from bonds with a maturity of 28 days and a coupon of 7.69% p.a.
The par value of one bond is 1,000 roubles. The bonds were sold at 100% of their par value. The coupon is payable at maturity.
The arrangers of the bond issue are Gazprombank and Svyaz-Bank.
The bonds are on the Moscow Exchange’s Quotation List Level 1. The depository is National Settlement Depository.