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26.02.06

RZB Group concludes largest leasing securitisation in Central andEastern Europe

Raiffeisen Leasing Polska S.A. (Raiffeisen Leasing), the Polish leasingsubsidiary of Raiffeisen International Bank-Holding AG (RaiffeisenInternational) has closed a PLN 640 million (approx. EUR 167 million)vehicle leasing securitisation transaction.

The transaction is the first of its kind in Poland. It is among thelargest securitisation transactions ever structured in Central andEastern Europe (CEE), and is the largest leasing securitisation closedto date in the region. The transaction refinances more than 10,000individual leasing contracts with Polish small- and medium-sizedcompanies (SME) and micro-companies and has an average tenor ofapproximately four years.



The transaction was structured andarranged jointly by State Street Global Markets LLC and RaiffeisenZentralbank Osterreich AG (RZB). Via its listed subsidiary RaiffeisenInternational, RZB operates one of the leading banking and leasingnetworks in CEE.



Attractive instrument for investors

Securitisation is an efficient means of funding and transferring therisk of a portfolio of loans or leases from their originator toinvestors via the capital markets. Securitisation transactions arewidely used by banks, leasing companies and other corporations to obtainrefinancing at attractive rates and to repackage the risk of assetportfolios so that it can be efficiently transferred to the capitalmarkets.

"Securitisation is an important instrument to support our growth inCentral and Eastern Europe", said Herbert Stepic, CEO of RaiffeisenInternational."Besides various other benefits, including adiversification of our funding, our main focus is on taking advantage ofportfolio risk mitigation", he added.

Through this transaction, Raiffeisen Leasing transferred receivablesarising from a portfolio of vehicle leasing agreements to ROOF Poland,Sp z o.o. (ROOF), a Polish company specifically incorporated for thistransaction. ROOF financed its acquisition of the portfolio by issuingsenior and junior-ranking notes to investors and by taking asubordinated loan. The notes and loan are limited-recourse instrumentswhereby payment of interest and principal is made solely with fundscollected from the lessees of the securitised contracts. The creditorsof ROOF have no recourse to Raiffeisen Leasing.

Access to favourable conditions

The relationship between Raiffeisen Leasing and its customers remainsunchanged since their contracts will still be administered by RaiffeisenLeasing. However Raiffeisen Leasing''s customers will benefit from theparticipation of the European Investment Bank (EIB) in the transactionas an investor in the senior notes issued by ROOF. Under the terms ofthe transaction, Raiffeisen Leasing will pass on to its customers thefunding benefits associated with the interest rate on the note placedwith the EIB.

"This transaction reflects RZB''s strategy of dis-intermediatingbalance-sheet-intensive lending in Central and Eastern Europe",commented Karl Sevelda, RZB-Board Member responsible among others forCorporate Finance."Securitisation enables us to develop our retail andSME coverage in the region fast, sharing risks in the form of securitieswith institutional investors in the West who gain unparalleled accessthrough a standardised product to these rapidly growing markets. It is atechnique we can also offer to other lenders looking for similarrisk-mitigation."

"As a neutral partner and with our unique access to institutionalinvestors we are pleased to have arranged the transaction in cooperationwith RZB", said Charles Hindmarsh, executive vice president of StateStreet Corporation.

The following parties, listed in order or seniority, have participatedin the funding of ROOF:

· Galleon Capital LLC, an Asset Backed Commercial Paper Conduit sponsored by State Street, and the European Investment Bank (EIB) purchased the senior notes;

· the European Investment Fund (EIF) provided a guarantee for the mezzanine notes, which were purchased by Galleon; and

· Bank Winter& Co Aktiengesellschaft provided the junior loan.

The EIB and EIF participate in the transaction in order to facilitatethe financing of SME within the European Union.

The parties to the transaction were advised by Freshfields BruckhausDeringer as Transaction Counsel, by Wierzbowski Eversheds as PolishCounsel and by Price Waterhouse Coopers as Tax Counsel.

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Raiffeisen International operates one of the leading banking networks inCEE with 16 subsidiary banks and many leasing companies in 16 markets.9.2 million customers are served via 2,400 business outlets. RaiffeisenInternational is a fully consolidated subsidiary of RZB, which owns 70per cent of the common stock. The remaining 30 per cent is free float,the shares are traded on the Vienna Stock Exchange. RZB is a leadingcorporate and investment bank and the central institution of theAustrian Raiffeisen Banking Group, the country''s most powerful bankinggroup.

Raiffeisen-Leasing Polska is the third-largest local leasing company interms of new vehicle leasing volume. It has been active in the Polishmarket since 1998 and provides vehicle, equipment and real estateleasing. New business volumes amounted to approximately PLN 1.44 billion(EUR 375 million) and total assets amounted to PLN 1.99 billion (EUR 515million) at the end of 2005.

State Street Global Markets is the investment research and trading armof State Street Corporation, one of the world''s leading investmentservicing providers and institutional asset managers. State StreetGlobal Markets provides specialized investment research and trading inforeign exchange, equities, fixed income and derivatives as well as arange of structured finance services. Its goal is to enhance andpreserve portfolio values for asset managers and asset owners. From itsunique position at the crossroads of the global markets, it creates andunlocks value for its clients with original flow-based research,innovative portfolio strategies, trade process optimization, and globalconnectivity across multiple asset classes and markets.

The European Investment Bank (EIB), the European Union''s financinginstitution, funds projects that contribute to the integration, balancedregional development and economic and social cohesion of the EU MemberStates. Outside the Union, the EIB implements the financial componentsof agreements concluded under European development aid and cooperationpolicies. Totally, the EIB has provided about EUR 2 billion forimplementation of smaller projects (from EUR 40,000 to EUR 25 million)of SME and municipalities in Poland. This represents approximately 18per cent of the overall EIB lending in the country amounting to EUR 11billion since 1990.

The European Investment Fund (EIF) is the EU financial institutionwithin the EIB Group specialising in SME. EIF provides guarantees,invests in venture capital funds and provides financial engineeringservices. Guarantees were issued for EUR 1.7 billion in 2005, bringingthe total portfolio to EUR 9.3 billion at year-end 2005. EIF''s guaranteeactivity is conducted with its own resources and under mandates from theEuropean Commission. Securitisation backed by SME financing is a coreactivity for EIF, having so far participated in some 50 transactionsbacked by more than EUR 51 billion of SME financing. EIF enjoys aAAA/Aaa/AAA rating and multilateral development bank (MDB) status. Theownership structure of EIF comprises EIB as lead shareholder (some 62per cent) alongside the European Commission (30 per cent) representingthe European Union and some two dozen banks and financial institutions.

Bank Winter& Co AG is a privately owned bank with its head office inVienna. With total assets of EUR 2,050 million and an equity of EUR 151million it has a long-lasting experience in transactions in CEE with aspecial focus on trade financing and other niche products.

Freshfields Bruckhaus Deringer is one of the world''s leading law firmswith offices in 28 cities around the world. Its clients include majorfinancial institutions, asset originators, asset purchasers, insurers,rating agencies and other market organisations. Freshfields BruckhausDeringer offers a combination of local and international expertise fromits international network of offices and has acted on many of the mostsignificant securitisation transactions completed in Europe as well asmany notable transactions in Asia and the US.

For any questions, please contact:

Michael Palzer, Raiffeisen International Bank-Holding AG

Tel +43-1-71707-1504, michael.palzer@ri.co.at

State Street: Samir Dikic,Northoff.Com Public Relations Beratung,

Tel +49 69 952977-50, Fax:+49 69 952977-20, statestreet@northoff.com

 

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