July 29, 2019
The international impact asset manager, responsAbility Investments AG, has closed a US$175 million securitization of loans to microfinance and SME-finance institutions in emerging markets. The proceeds will be used to fund financial intermediaries providing capital to 30,000 small businesses and 5.6 million microfinance borrowers. 81% of the borrowers are women. JP Morgan acted as arranger and placement agent.
The transaction pools the borrowing needs of 26 micro and SME finance organizations, allowing them to achieve the scale necessary to access global capital markets. At the same time, the transaction enables investors to contribute to financial inclusion in developing countries, earn a commercial return, and diversify their exposure across multiple borrowers and geographies.
Key investors in this transaction include the Overseas Private Investment Corporation (OPIC), the US government agency, providing the initial capital necessary to mobilize the private institutional investment in the deal, and Alecta, the fifth largest occupational pension provider in Europe, and investing in the essential risk capital. Impact investing firm Calvert Impact Capital also brings U.S. private capital into the deal.
Latham & Watkins advised JP Morgan in the transaction with a team led by London finance partner Jeremiah Wagner, with associates Boin Cheong, Courtland Tisdale, Caleb Volz, Adam Kelly, and Anca Moldovan, along with the assistance from Latham’s New York, Chicago, Los Angeles, Silicon Valley, and Washington, D.C. offices. London partner Lene Malthasen and counsel James Baxter also advised BONY in the transaction.