Interview with Mikhail Malinovsky and Dmitry Rumyantsev for Expert RA about the market and the place of the LECAP Ecosystem in it

Interview with Mikhail Malinovsky and Dmitry Rumyantsev for Expert RA about the market and LECAP Ecosystem’s place in it

April 29, 2026

Tags:#News

Published on the Expert RA website

We like being part of an industry that benefits society. That is why we try to sense where market demand is emerging and go there. That is how the LECAP ecosystem is formed
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- In the legal advisory market, LECAP stands out with its own approach, bringing together a legal adviser, the largest bond trustee (LCPIS), and a management company (FOCUS Management) within a single ecosystem. How does this model, in practice, transform the approach to structuring and supporting transactions? What do you see as the main advantages of this infrastructure-based approach for your clients — issuers and investors?

- Our ecosystem follows a very simple principle: to provide the most effective and convenient instrument for raising capital for our clients. At the same time, the main focus is on balancing interests and on thoroughly developed transactions both from the standpoint of documentation and the exercise of investors’ rights, including those of a broad base of retail investors.

It is precisely for these purposes that we have developed our own infrastructure, which allows our partners to create financial products and bring them to clients. We constantly study international experience in product structuring and rating agency methodologies and implement the most innovative practices in the market.

The natural symbiosis of investment bankers and lawyers in our ecosystem makes it possible to see the product in 3D, while our own infrastructure speeds up client project processes. Our goal is repeat business with our clients, so it must be convenient and aligned with their interests.

As an ecosystem, we often sense earlier than others where market demand may be forming, and we immediately go there to anticipate where we can create value for our long-term clients.

We truly love what we do.

- Your team was at the origins of securitization development in Russia, including work with non-standard assets. Given your positioning as architects of innovative transactions, please tell us about the most unusual or legally complex projects that LECAP has implemented recently and what competencies allowed them to be successfully completed?

- If we talk about securitizations, standard mortgage transactions became a super-simple product 10 years ago. A regulatory criterion even emerged for them — PTS (plain transparent securitization).

We view securitization as a change in the originator’s business model: the investor, by providing funding, becomes the owner of the cash flow to which the originator sells its expertise. In essence, this is a transition to an asset-light model and a way to scale a business. From this perspective, it is not entirely appropriate to assess securitization by comparing it with debt financing for the originator — it is about launching a new business model.

In this context, I consider securitization of arrears to be among our interesting deals, as well as the planned securitizations of offtake contracts, the first of which we completed eight years ago (it was a contract for the repair of property of one of the state monopolies).

From a legal standpoint, I consider the issuance of off-balance-sheet convertible bonds innovative; last year they enabled PAO PROMOMED to attract more than 1,200 high-net-worth investors into equity in the context of extremely high rates. The ability to convert into shares made it possible to raise more than RUB 3.3 billion on a zero-coupon basis. High interest rates and significant volatility in the equity market make it possible to expect further development of such products.

- What key legal aspects would you advise a potential issuer, who is only considering its first securitization transaction, to assess first? What non-obvious risks or bottlenecks are often overlooked at the initial stage?

- From the legal and infrastructure standpoint, we do not see any problems. The main issues are operational. In addition, as I mentioned earlier, one should not compare the economic effect of securitization with corporate debt. It entails a paradigm shift and a new business: the originator sells a certain cash flow and becomes a servicing agent in the interests of investors. In essence, this is a separate, standalone money business that the market will provide.

By the way, in recent months we have seen discussion of securitization in the context of the originator possibly getting acquainted with the market and the institutionalization of factors affecting investment attractiveness. Securitization makes it possible to create a security, usually with a higher rating, meaning the company can begin building a track record with institutional investors who previously were not interested in its plain vanilla debt because of the rating level.

IT solutions can be added to the list of problems. Companies whose software was used by banks before 2022 mostly left. It takes months to resolve issues related to how to configure and synchronize the exchange of information between transaction parties.

- DOM.RF mortgage securities remain one of the market’s locomotives. As a lawyer who also worked on preparing the DOM.RF IPO, what fundamental differences in legal structure and documentation do you see between securitization transactions with DOM.RF surety and the numerous on-balance-sheet securitization transactions that banks are also actively concluding today?

- The DOM.RF surety changed the mortgage market. It made it possible to increase market volumes severalfold, but at the same time the expertise in analyzing the underlying portfolio shifted from market participants to the development institution. The underlying portfolio is no longer analyzed by investors and rating agencies. It is sufficient for them to rely on the validity of the surety, which in essence consolidated the entire market.

- Experts increasingly speak about the prospects for securitization of non-standard assets — from future receipts under PPP projects to corporate loans. Which asset classes in your practice today appear to be most prepared for securitization from a legal standpoint, and what specific pitfalls do lawyers face when structuring such transactions?

- The main focus is credit quality and well-developed documentation. We consider leasing securitizations to be interesting transactions — a ready-made product for institutional investors when financing large projects that require the purchase of new equipment. We have very deep expertise in these areas.

At the same time, as interest rates decline, retail investors’ appetite for risk increases — and here there is a need for high-quality, well-developed transactions in the NPL area.

Personally, I now enjoy working on corporate securitizations, especially when there is a prospect of taking the originator public via an IPO in a couple of years.

- Your credo is to support a deal from concept to market launch, taking into account the difference between doing a deal and closing it. Please tell us how LECAP’s work is structured at each stage of a complex project in the bond market — whether securitization or convertible bonds: from the initial development of the concept to post-issuance administration handled by your management company FOCUS Management?

- First, we put ourselves in the position of a potential buyer. Our team has continuous experience studying the global market. We can even afford to buy one or another product for ourselves in order to understand how the idea works.

Second, the core of the law firm consists of civil law practitioners who have a very deep understanding of private law; there are also lawyers qualified under English law. This makes it possible to work through the idea internally over one or two weeks from the standpoint of its legal robustness.

Then comes registration with the Central Bank — in my estimation, at any given moment there are four to ten issues in registration, usually innovative ones. And this has been the case for 15 years. This is quite unique experience and an opportunity to look at the product from the standpoint of the public interest. And, of course, there is an understanding of how remarks are addressed: the ability to predict and factor in remarks in advance makes it possible to register issues within time frames that are comfortable for the projects.

At the final stage, there is the work of the management company: the colleagues regularly place securities through the Russian infrastructure. Here, well-established infrastructure solutions make it possible to act as a unified team with market infrastructure both in mass placements involving hundreds of investors and in club deals. The management company also means continuously accumulated tax expertise and expertise in keeping records of financial instruments.

- In 2025, work intensified on launching a securitization mechanism for digital financial assets (DFA), including active discussions of credit DFAs, which are analogous to synthetic securitization. What key legal barriers do you think still need to be removed for this model to function at full scale, and when might we see the first pilot transactions involving your clients?

- The problem is balance sheet relief. DFAs do not yet allow regulatory capital relief. In addition, current processes reveal gaps in DFA regulation. When payment problems arise, it is unclear how they should be restructured. Properly speaking, ordinary securities-law approaches should be applied. That means they will become ordinary bonds, just with a new accounting system. Something like that has happened several times during the 150-year history of bonds in Russia.

- Which modern tax aspects of securitization transactions and other structured products in the bond market are today the most challenging for clients and require additional legal analysis?

- The main tax complexity is the securitization of receivables that initially include VAT, such as leasing, services, and rent. This issue requires deep analysis from lawyers, financiers, and tax specialists alike. We continuously work in this area to meet our clients’ financing needs.

- In 2022, the structured products market in Russia underwent a radical reset. Today, several years later, how do you assess the maturity and completeness of the Russian legal environment for the development of complex structured products?

- First of all, it should be noted that in 2022 the Russian structured bond market underwent a real infrastructure stress test, in which structured notes under Russian law, thanks to the regulator, infrastructure, issuing banks, and bond trustees, demonstrated incredible resilience, which favorably distinguished them from similar products issued under English law.

We have teams ready to meet market needs even where the legislative superstructure lags behind. In the Talmud there is an idea: to formulate a prohibition, wisdom is not needed — wisdom is needed to formulate permission. In structured products, one can show variability, expanded by the possibility of physical delivery. In addition to classic credit-linked notes and autocalls, this made it possible to create a new class of market assets.

- A key element of your ecosystem is Legal Capital Investor Services (LCPIS), which is the largest independent bond trustee in Russia. How has the role of the bond trustee changed under current market conditions, and what are the main legal challenges faced by investors in structured products that LCPIS helps address?

- It has changed radically. A bond trustee must now be able to communicate with tens of thousands of investors; the market has become retailized. Previously, most issues were in the hands of institutional investors who decided everything. Now bond placements take place in such a way that the number of holders is comparable to the population of an average Russian city.

Enormous expertise and solutions are required.

The bond trustee must be able to understand the product. And, most importantly, have the courage to defend investors’ interests even at the structuring stage. The issuers and arrangers we work with hear these comments. But there are different cases in the market.

- LECAP participated in the development of structured bonds under the new legislation in Russia. Looking back, how has the practice of issuing these instruments evolved in recent years, and what legal innovations do you see in this segment in the near term? If you could propose three legislative initiatives that, in your opinion, would give the strongest impetus to the development of the securitization and structured products markets in Russia over the next one to two years, what would they be?

- Not so long ago, the regulator published a report on simplifying issuance. We prepared our own position paper, which includes a large block of proposals relating to structured bonds. If anyone is interested, write to us and we will share it.

The Russian infrastructure has also taken a huge step forward over the past year.

- Today LECAP is a team of more than 30 market experts. Given the rapid digitalization of the financial market, the emergence of DFAs, and the increasing complexity of financial instruments, what new competencies and skills do you believe are becoming critically important for a lawyer specializing in capital markets and structured products?

- Internally, we sometimes hold lecture-meetings called “The Essence of Things.” It is important for a lawyer to understand that they are working not just with documents, but with the formalization of real social relations. This is a reality, albeit a social one. One needs to be able to see the objects existing within it from different angles in order not to distort one’s understanding of it. This is as true for securities as it is for any other system of human knowledge.

In fact, this month we launched another project. If everything works out, we will talk about it at the end of summer. I hope it will also become part of the ecosystem.

Next month we plan to launch a new website, and we will try to use it to talk about our work.