BTA Ipoteka Mortgage Securitization
MIGA has issued $10.2 million in guarantee coverage to the First Kazakh Securitization Company, B.V., and $90,000 to ABN AMRO Bank N.V., for a securitization of residential mortgage loans in Kazakhstan. MIGA is providing political risk coverage for a portion of interest payments on the mortgage portfolio in the event of government-imposed transfer and convertibility restrictions, as well as for expropriation.
The transaction, valued at $141.4 million, is Kazakhstan’s first long-term capital markets issue for a true-sale securitization of mortgages. First Kazakh Securitization Company B.V. will use the proceeds of the issue to refinance the original warehousing arrangements put in place in February 2006 to fund the purchase of receivables arising from Kazakhstani mortgage loans originated by BTA Ipoteka, the consumer lending subsidiary of Bank Turan Alem. The loans are secured on properties located in the Republic of Kazakhstan. MIGA insured the first stage of this securitization in 2006.
Kazakhstan has experienced remarkable growth in its residential mortgage market in recent years. The MIGA guarantee will help further Kazakhstan’s efforts to support the growth of financial instruments for leasing, mortgages and other assets.
This is MIGA’s fourth capital markets transaction. MIGA’s coverage was instrumental in increasing the transaction’s rating by Fitch to A- (above the country ceiling of BBB+).