Supervisory Council of AHML Approves 2014 Business Plan
OREANDA-NEWS. The Supervisory Council of OJSC “The Agency for Housing Mortgage Lending” (AHML) approved 2014 business plan at its meeting held on 19 December 2013.
The business plan was developed with view to implementing the Strategy for the Development of Housing Mortgage Lending in the Russian Federation up to 2030 and the Development Strategy of AHML’s Group of Companies pursuant to which in 2014, AHML will pursue the following main lines of business, acting:
- as the secondary mortgage market operator - establishing mechanisms to provide liquidity for market players and capital release. As for the secondary market, the corporate objective of AHML is paving the way for sustainable and qualitative growth of the mortgage market, primarily in the economy class segment, through developing the mortgage-backed securities market.
Taking into account the lessons learned, besides establishing a standard platform to issue mortgage-backed securities (MBS) and purchase MBS issued by other market players, the nearest AHML’s target for late 2013 and 2014 is to establish a multi-originator platform and arrange first joint issuance of mortgage-backed securities by several market players at a time. This will help reduce securitization deals preparation time and improve their economic efficiency.
- as the primary mortgage market operator - expanding its primary mortgage market footprint (including refinancing) to 6.6 per cent in 2018 and providing gradual reduction of the margin between the originated/refinanced loans and the cost of raising funds in the secondary market to 3.5 percentage points in 2014 (2.2 percentage points by 2018) in line with strategic performance indicators. 2014 business plan provides for refinancing mortgage loans totaling RUB 66 bn, out of which RUB 16.2 bn will be allocated to refinance mortgage loans extended to certain population groups.
- as the infrastructure services operator – shaping conditions for developing (qualitative and quantitative growth) of the mortgage market and promoting competition in the market lowering the mortgage lenders margin through developing the infrastructure and the mechanisms of efficient redistribution/mitigation of operational/credit risks. Cutting the cost of mortgage servicing is envisaged along with promotion of infrastructure service, embracing mortgage asset service including back service and master service.
- as the mortgage insurance operator – developing mortgage insurance and improving its efficiency as the mechanism for risks redistribution within the framework of housing mortgage lending in 2014 to make mortgage loans with low down payment more affordable and to release the lenders’ capital, developing and applying mortgage insurance as a credit enhancement mechanism in securitization transactions.
- within the framework of financing housing construction – implementation of programs and introduction of products in the context of stimulating housing supply in the primary market and increasing the volume of housing construction allowing to put into operation not less than 15 per cent of total economy class housing commissioned through construction carried out by developers, inter alia, in the context of the state program “Providing Affordable and Comfortable Housing and Public Utility Services for the Citizens of the Russian Federation” thus increasing the affordability of debt financing and share financing for developers and boosting competition. All in all, RUB 23.5 bn will be allocated in 2014 for implementing the “Stimulus” program and introducing other products and programs along this line of business.
The main sources of financing AHML’s activities in 2014 will be: the placement of mortgage-backed securities (MBS); tapping international capital markets; placing corporate bonds either secured or unsecured by the state guarantees of the Russian Federation in the Russian market.
Besides, the Supervisory Council approved at its meeting a report on implementation of the Program of Assistance for Borrowers Having Found Themselves in a Temporary Difficult Situation in the aftermath of the global economic crisis of 2008-2009 and a number of related party transactions.
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