The basket of DOM.RF mortgage bonds for Russia’s Federal Treasury repo trades performed via National Settlement Depository’s collateral management system (CMS) has been expanded by including two new issues. The basket now comprises the April issues of mortgage-backed bonds with the guarantee of the unified development institution (IADOM B1R7 and IADOM B1R8) with a total value of almost RUB 16 billion.
In March 2021, the Federal Treasury launched weekly repo auctions with a new securities basket GCMBS which included DOM.RF mortgage bonds. Each auction’s amount is RUB 20 billion. To date, 10 auctions have been conducted; at these auctions, credit organizations succeeded in raising almost RUB 100 billion secured by mortgage bonds. The GCMBS basket includes 17 issues of standardized mortgage-backed DOM.RF bonds with an aggregate value of almost RUB 400 billion.
Roman Artyukhin, Head of the Federal Treasury, said:
“Starting 17 May 2021, the Federal Treasury, together with DOM.RF, expanded the collateral basket of repo agreements by adding two new mortgage bond issues. Repo transactions collateralized by DOM.RF mortgage bonds will increase the effectiveness of operations for managing balances in the unified treasury account.”
Alina Akchurina, Managing Director for Collateral Management System Development, NSD, added:
“The expansion of the Federal Treasury's basket of securities for repo transactions with NSD’s Collateral Management System is another opportunity to effectively place free cash. Since the inclusion of DOM.RF mortgage-backed securities as collateral, we have seen a steady increase in interest in this instrument from market participants due to the wide range of instruments included in the Federal Treasury securities basket. We expect that expansion of the securities basket will further increase transaction volume.”
Artyom Fedorko, Deputy CEO, DOM.RF, pointed out:
“The results of the auctions show high demand for repo transactions involving DOM.RF mortgage bonds. The possibility of attracting liquidity under mortgage bonds provides banks with the necessary resources to increase mortgage lending. We expect that the DOM.RF mortgage bond market will continue to grow, and we will consider increasing the limit for these transactions from the current RUB 100 billion in accordance with market needs.”
For reference:
Since December 2016, under the program of standardized mortgage bonds with the guarantee of DOM.RF, 31 issues totaling more than RUB 930 billion have been placed. Development of the mortgage bonds market is one of DOM.RF’s key goals in accordance with Federal Law No. 225-FZ "On Assisting the Development and Improvement of Management in the Housing Sector and on Amending Certain Legislative Acts of the Russian Federation," dated 13.07.2015, and is one of the key tools to achieve target indicators of President Putin's Executive Order “On the National Development Goals of the Russian Federation through 2030,” dated 21.07.2020, and the National Project "Housing and Urban Environment." The Order has set the goal of improving housing conditions for at least 5 million families annually.