Symbiotics closes the first series of its Subordinated Debt CDO programme to pro...

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Sep 2007
Geneva, Switzerland , September, 21 2007 - Symbiotics Securities SA, the microfinance investment structuring boutique of Symbiotics, closed its first series of subordinated debt CDO. Symbiotics Securities SA acted as sole sponsor and arranger of the deal and as sole origination agent of the underlying loans, for microfinance programmes in Peru, Nicaragua and Kazakhstan. The Notes were sold to investors in Switzerland, the equity tranche through the government agency Seco/Sifem, the mezzanine tranche to private investors through responsAbility and the senior notes to pension funds and institutional investors through Finethic Microfinance.

Microfinance Loan Obligation SA- tailor made securities

This transaction is the fifth CDO closing of Microfinance Loan Obligations SA, a microfinance CDO platform, setup jointly between the European Investment Fund and Symbiotics. Microfinance CDOs aim at pooling microfinance debt and provide adequate funding instruments tailored to the needs of both the underlying microfinance institutions and the noteholders. This transaction provides quasi capital (eight year subordinated debt accounted for as lower tier two equity according to the Basel II convention) to mature microfinance programs needing further equity base in order to strengthen their transformation or their growth through leverage. The investments provide for equity to its beneficiaries while by-passing usual equity challenge whether at the governance, regulatory, valuation, currency, exit or dividend levels. Such investments also allow for investors to buy into risk adjusted return investment opportunities, with notes priced at their market equivalent internal rating using CDO rating models. Microfinance CDO notes issued through Microfinance Loan Obligations SA typically offer more efficient and legally solid transactions than direct loans, and moreover are transferable securities, adequately adapted to specialized fund manager requirements. Symbiotics will pursue its objective to replicate annually such Subordinated Debt CDO joining both ends of the value chain on efficient and professional terms in the future.



 

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