BlueOrchard Loans for Development 2006 (BOLD 1)
Product summary
BOLD 1, which closed in May 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.
The Dutch development bank, FMO, underwrote the subordinated portion of the product, acting as a catalyst for private sector development by accepting the ‘first-loss' position in the structure.
The product has many impressive and innovative features including: local currency funding for over one third of the portfolio and hedged foreign exchange risks for investors.
At the time of its launch, BOLD 1 was the largest single commercial investment transaction ever completed in microfinance (USD 99.6 million) - an important accomplishment that opened up new perspectives for the microfinance industry.
The product attracted numerous large mainstream institutional investors, many of whom had no prior experience in microfinance, further extending the market for socially responsible investments.
Key product features
- Solid returns
- Opportunity for investors to choose level of risk;
- Good diversification option due to its low correlation with other asset classes;
- Low risk of default as MFIs are typically highly solvent;
- Local currency loans;
- BOLD 1 was the world’s largest ever microfinance CDO transaction at the time of its closure.
Social Impact
- Contribution to growth in emerging economies;
- Supporting the alleviation of poverty, leading to better housing, nutrition, health and education;
- Empowering marginalized groups, such as women, rural entrepreneurs and food producers;
- Effectively promotes commercial microfinance investment to the mainstream financial market.
Key figures as of 30 September 2009
| Total assets | USD 100.8 million |
| Microfinance portfolio | USD 96.7 million |
| Nr. of loans outstanding | 21 |
| Nr. of MFIs with outstanding loans | 21 |
| Yield | A1 notes: Euribor EUR 3 months + 0.75% |
| Yield (cont.) | A2 notes: 5.59% |
| Yield (cont.) | A3 notes: 6.02% |
| % of loans made in local currencies | 32.6 % |
Regional concentration as % of the portfolio at inception
Fund features & disclaimer
The partners
Issuer: BlueOrchard Loans for Development 2006-1 S.A.
Sponsor: BlueOrchard Finance S.A.
Servicer: BlueOrchard Finance S.A.
Trustee:
J.P.Morgan Corporate Trustee Services Limited
Principal Paying Agent:
JPMorgan Chase Bank N.A.
Paying Agent: J.P. Morgan Bank Luxembourg S.A.
Arranger and Class A Notes Placement Agent:
Morgan Stanley & Co. International Limited
Class B Notes Co-Arranger and Underwriter:
The Netherlands Development Finance Company
Swap Counterparty: Morgan Stanley Capital Services Inc.
Issuer Currency Exchange Provider: OOO Morgan Stanley Bank (Moscow)
Corporate Services Provider:
Structured Finance Management (Luxembourg) S.A.
Account Bank: JPMorgan Chase Bank N.A.
Euro Account Bank: JPMorgan Chase Bank N.A.
Sterling Account Bank: JPMorgan Chase Bank N.A.
Registrar: J.P.Morgan Bank Luxembourg S.A.
Cash Manager: JPMorgan Chase Bank N.A.
Counsel to the Placement Agent:
Allen & Overy LLP
Dlsclamer
These materials are not an offer of securities for sale in the United States of America. The securities to which these materials relate have not been registered under the U.S. Securities Act of 1933, as amended (the Securities Act), and may not be offered or sold in the United States of America absent registration or an exemption from registration under the Securities Act. There will be no public offering of the securities in the United States of Amercia. BOLD is not authorised for public sale in Switzerland and must therefore not be publicly marketed in Switzerland.
The performance data quoted hereith represents past performance, and is no guarantee of future results. Your returns and the principal value of your investment will fluctuate so that your shares or accumulation units, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted above.
