Brac microcredit securitisation honoured
The world's first triple A rated local currency securitisation of microcredit receivables for Brac has been recognized by the financial media as one of the most innovative and ground breaking financial market transactions in 2006, says a press release. The Asset, CFO Asia and IFR Asia, three of Asia's leading financial magazines, honoured the transaction in their annual awards that were announced in December. It is also the first time that a capital market deal from Bangladesh has picked up such accolades from the international financial media. CFO Asia named the six-year US$180 million equivalent programme as one of its outstanding deals for 2006. "The deal brought innovation to funding for the poor, introducing a commercial transaction that may be replicated in countries where micro credit exists," said CFO Asia's editorial. The deal brought the global financial markets to the doorsteps of nearly 1.2 million households in Bangladesh. Brac is the world's largest national Non Government Organization (NGO) with over 5 million borrowers (mostly women) and 100,000 employees. Brac has also expanded its operations to Sri Lanka, Afghanistan, Tanzania, Uganda. Brac has set up two support organizations in the UK and US and has been registered in Southern Sudan and Pakistan. IFR (International Financing Review), Asia honoured the deal with the title of best securitization in Asia Pacific for 2006. "One of the most impressive aspects of the transaction is the way that it deals with the sheer complexity of a dynamic pool that will contain about 3.3 million short tenor loans for which the average outstanding principal is around US$95," read IFR Asia's editorial. The Asset magazine awarded the transaction the best domestic securitisation in Asia in 2006, praising the deal as one of the largest financing efforts dedicated to advancing poverty-focused micro credit. The Brac securitization closed in September 2006 and was arranged by RSA Capital, Citigroup, FMO and KfW. Two other local banks also invested in the certificates, along with Citibank, NA in Bangladesh. "The recognition from the financial media for this transaction is most appreciated by Brac and our partners," said Bob Annibale, global director of Citigroup's Microfinance Group. "We would like to thank all our partners who helped make this such a successful transaction. We look forward to working with Brac on future transactions," said Mamun Rashid, managing director and Citigroup's country officer for Bangladesh.
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