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Press Release

Friday, September 15, 2006

U.S. Small Business Uses OPIC Loan to Support First Public Securitization of Mortgage Certificates in Russia

WASHINGTON, D.C. – A U.S. small business has used a loan from the Overseas Private Investment Corporation (OPIC) to support the first public securitization of mortgage certificates in Russia, opening a lucrative new avenue of funding for Russian mortgage lenders and the prospect of more affordable terms of homeownership for Russian homeowners.

Greenwich Financial Services LLC, a Greenwich, Connecticut-based broker-dealer, used a $6 million OPIC direct loan to purchase the Class B Notes. OPIC’s financing was an essential component in the successful completion of a $72.6 million mortgage-backed securitization (MBS) of mortgage loans by Russia’s CityMortgage Bank. The residential mortgages were originated primarily in Moscow and St. Petersburg.

The transaction also represented the first MBS in Russia involving U.S. investors under Rule 144A, a Securities and Exchange Commission regulation allowing qualified institutional buyers to buy and trade unregistered securities; and the first securitization of Russian mortgage certificates, which allow for simpler and more efficient transfer of mortgages for investment purposes.

Moody's Investors Service rated the MBS senior tranche Baa2 and the Class B mezzanine Note B1. Russia's London-based Moscow Narodny Bank (MNB) and Greenwich Financial Services were lead managers of the offering. RZB Group was senior co-lead manager. Allen & Overy was legal advisor to OPIC, Greenwich Financial Services, MNB and other parties to the transaction.

“By providing a Russian bank access to capital markets for a mortgage-backed securitization, this groundbreaking transaction opens the Russian mortgage market to dynamic sources of funding, the ultimate benefit of which will be more affordable homeownership terms for Russian homeowners,” said OPIC President and CEO Robert Mosbacher, Jr. “OPIC is pleased to support a U.S. small business which is playing an important role in this project.”

William Frey, president of Greenwich Financial Services, said, “We used U.S. structuring conventions not unlike the U.S. Agency MBS model to improve the execution and pave the way for future deals. We designed the transaction specifically so we would be able to replicate it to benefit investors and Russian homeowners. We welcome OPIC’s participation and look forward to a continuing relationship.”


OPIC is the U.S. Government’s development finance institution.  It mobilizes private capital to help solve critical development challenges and in doing so, advances U.S. foreign policy.  Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets catalyzing revenues, jobs and growth opportunities both at home and abroad.  OPIC achieves its mission by providing investors with financing, guarantees, political risk insurance, and support for private equity investment funds.

 

Established as an agency of the U.S. Government in 1971, OPIC operates on a self-sustaining basis at no net cost to American taxpayers. OPIC services are available for new and expanding business enterprises in more than 150 countries worldwide. To date, OPIC has supported nearly $200 billion of investment in over 4,000 projects, generated $74 billion in U.S. exports and supported more than 275,000 American jobs.