Business news from Ukraine

According to Fixygen, PJSC “Ukrainian Financial Housing Company” (“Ukrfinzhilia”), the operator of the state mortgage program “eOselya,” is working to prepare an issuance of securitized securities on international capital markets following the end of the war unleashed by Russia, with a potential volume of approximately EUR1 billion, said Chairman of the Board Yevhen Metzger.

“We are preparing and are indeed the company that will likely be the first to carry out securitization. We have JP Morgan advising us and guiding us into open capital markets,” he said during a discussion on the prospects of Ukraine’s stock market organized by the Kyiv International Economic Forum last week.

Metsger noted that to this end, “Ukrfinzhilye” will form mortgage pools worth the equivalent of $2–3 billion.

The head of “Ukrfinzhilye” clarified that it remains to be determined which markets to enter, as the American and European markets have significant differences. “We must be prepared for both scenarios,” he added.

According to him, the path for issuing securitized securities was paved by the Law on Securitization and Covered Bonds (No. 15172), which was developed jointly with the National Securities and Stock Market Commission and the European Bank for Reconstruction and Development (EBRD).

Metsger noted that there are many investors in the international market active in the housing finance sector, such as the Belgian fund Revive.

“Let’s be frank. We hope that securitization or the issuance of mortgage Eurobonds will be possible after the war. I do not believe that we will be able to do this now—this year, next year, or during the war,” the head of “Ukrfinzhylia” emphasized.

He added that it is also necessary to adopt subordinate legislation and regulations that will allow for proper preparation for the issuance of securitized securities.

“That is why we are moving forward; we hope to use this year and next year productively to prepare for securitization,” Metzger concluded.