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Structured Products managed by BlueOrchard Finance S.A.

Microfinance structured debt products - a significant breakthrough in bringing capital markets into microfinance

Microfinance structured debt products are investment products modeled on Collateralized Debt Obligations (CDO). Bonds are issued to investors while loans are simultaneously issued to a portfolio of pre-selected microfinance institutions (MFIs).


There are two main benefits of this structure. The first is that it offers different tranches with different risk/return profiles, making it attractive to investors with different needs. Secondly, by pooling a large number of loans in this way, economies of scale can be achieved and the benefits passed on to MFIs, providing them with important source of funding at attractive rates. 

BlueOrchard pioneered structured microfinance loan products in collaboration with partners from the public and private sector. The following transactions were closed between 2004 and 2007.

 

BlueOrchard Microfinance Securities 1 (BOMS 1)

The first of its kind, BOMS 1 had two closings - in 2004 and 2005 -that provided seven-year loans at fixed rates to outstanding microfinance institutions (MFIs) in emerging markets. More [+]

 

BlueOrchard Loans for Development 2006 (BOLD 1)

BOLD 1, closed in 2006, was developed using a combination of BlueOrchard’s expertise and in-depth knowledge of the microfinance sector and Morgan Stanley’s experience in creating structured investment products, making it Morgan Stanley’s first venture into this area of investment finance. More [+]

 

BlueOrchard Loans for Development 2007 (BOLD 2)

Closed in 2007, BOLD 2 continued the success of BOLD 1 and was elected ‘Sustainable Deal of the Year’ at the Financial Time's Sustainable Banking Awards in June 2008. The BOLD 2 transaction was a landmark deal that has further promoted microfinance as an asset class to mainstream investors. The senior notes of BOLD 2 received investment-grade credit ratings from Standard and Poor’s Rating agency. This was the first time that a microfinance CDO had been rated publicly by a main-stream rating agency. More [+]

 

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Success stories

Cali Colombia making sweets.jpg

Since 13 years Rubiela Sanchez and her husband have been making and selling their famous manjar blanco and other sweets throughout Cali, notably at bus stations

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