The last couple of years have seen a dramatic growth in the number and type of Russian securitizations. This partly reflects the recovery of the Russian economy from the 1998 financial crisis but is also the result of a number of new and innovative legal techniques more appropriate to the international capital markets.
The transactions can be divided into offshore and onshore. In the offshore transactions, other than the originator, there is relatively little Russian party or Russian law involvement. In the onshore transactions, there is a mixture of Russian originator and offshore finance vehicles together with Russian law security and Russian situated assets forming part of a non-Russian law, larger transaction. The forthcoming implementation of a mortgage-backed securities law in Russia may create a more genuinely onshore product. In the meantime, the relatively underdeveloped legal and financial systems present both opportunities and challenges.
Offshore: Gazprom
The most obvious offshore example...