Category: CD Group Companies

TCX Fund a Cardano Development group company has for the first time ever, completed a crowdfunding campaign to fund a local-currency loan. The transaction concerns a EUR 200,000 loan, denominated in Ghanaian cedis, from the Dutch crowdfunding platform Lendahand to the solar developer REDAVIA. The loan proceeds will be used by REDAVIA to fund the rollout of solar farms for its corporate customers in Ghana. This local-currency deal is made possible by a partnership between Lendahand and the hedge provider TCX, with financial backing from KfW on behalf of the German Federal Ministry for the Environment,Nature Conservation and Nuclear Safety (BMU) and its International Climate Initiative (IKI).

Platforms like Lendahand allow retail investors to invest in loans to businesses in frontier markets. They lend to businesses for which it is difficult to access funding. Since platforms are lean and can raise funding quickly, they are flexible and responsive. That, and the interest from the public to invest, has made crowdfunding an important alternative source of development finance. Normally, the loans that platforms provide are in euro (or USD) because retail investors cannot be expected to take risk on exotic, frontier-market currencies. However, with a loan in euros, it is the borrower that takes the exchange-rate risk. Because frontier-market currencies tend to depreciate against the euro (or USD), often heavily and always unpredictably, the size of interest and principal payments in local-currency terms is uncertain.

Borrowers need to carefully consider and manage that risk. The market solution for this issue – who bears the currency risk? – is to lend in local currency and hedge the risk with a bank or, in the most difficult markets, with TCX. That solution is commonly used by institutional lenders but has never been made available to retail platforms. TCX, Lendahand and KfW/BMU are now cooperating to change that. The bespoke hedging structure developed by TCX with BMU funding and Lendahand as developing partner, allows the platform to offer a local-currency product to its borrower while still offering its investors a euro return.

Ruurd Brouwer/CEO TCX: “It is the mission of TCX to eliminate currency risk from development finance. It is important, especially for the businesses that platforms lend to, that platforms have access to the same hedging solutions as ‘normal’ lenders do. It has been great to work with Lendahand on this project. Like us, they were determined to make it happen. We hope to be doing many more deals with them, and eventually, with similar platforms globally.”

Koen The/CEO Lendahand: “Lendahand fights against poverty through impact investing. We are delighted that we can now offer local-currency loans to our clients. Many of our customers are small businesses with only local-currency revenues. It is our aim to provide sustainable loans to our customers and this new product allows us to service more businesses who have difficulty getting

Moody’s has assigned an A1 foreign-currency long-term issuer rating to Cardano Development group company TCX, with a stable outlook.

The main factors underpinning this rating are 1) the strong support of highly-rated shareholders and governments 2) the very strong liquidity profile 3) the Fund’s capital adequacy and 4) its prudent and high-quality risk-management policies and practices. The stable outlook reflects Moody’s expectation of solid growth in TCX’s business volumes over the coming years coupled with continued strong shareholder support.

Please read more about this rating action here.

On the 10th of June, Cardano Developement company Frontclear released its 2020 Impact Report. It was a watershed year for Frontclear. As the Impact Report demonstrates, they were able to continue to bring real impact on the ground in the countries they operate. Much of their FTAP activities went online, including capacity building through the launch of the Frontclear Academy and regulator support through the Money Market Diagnostic Portal.
 
The Report details case studies on Costa Rica, Mongolia and Uganda, with a special feature on legal & regulatory review and reform. The Report is highly interactive, offering the reader/viewer access to key policy documents, webinars, evaluations and a course on Money Markets on the Frontclear Academy.

Read the full report

International rating agencies, Fitch and Moody’s, have affirmed GuarantCo’s ratings of A1 and AA- respectively, both with negative outlook.

 June 2021

Fitch confirmed that the affirmation reflects the maintained financial soundness of GuarantCo’s funders, the company’s exceptionally strong risk-adjusted capitalisation and low risk investment portfolio.  As in previous years, Fitch has given GuarantCo, a Private Infrastructure Development Group (PIDG) company, a stand-alone credit rating of A which was uplifted to A1 due to GuarantCo’s strong shareholder support including the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust and the Netherlands, through FMO and the PIDG Trust. Fitch continues to assess GuarantCo’s liquidity and capitalisation as ‘very strong’, with the addition of new funding from Agence Française de Développement (AFD), in the form of a stand-by facility, having positively impacted the net par to capital ratio which Fitch use to assess capitalisation.

In December 2020, AFD provided GuarantCo with a EUR 100 million callable funding facility with a tenor of 15 years and in May 2021 Global Affairs Canada (GAC) committed CAD 40 million (c. USD 31.8 million) through a repayable facility providing further funder diversification whilst strengthening GuarantCo’s liquidity buffers.

Moody’s referred to GuarantCo as an “innovative business with high development impact” in their report. Their assessment of GuarantCo’s capital position has been balanced by continued recognition of strong liquidity buffers, including Moody’s opinion that GuarantCo is “establishing a track record of pro-actively managing its stressed exposures and recovering impaired assets” and high shareholder support which was bolstered by the addition of AFD and GAC.

Emily Bushby, Interim CEO of GuarantCo, said: “We are proud that both Fitch and Moody’s have re-affirmed our credit ratings. The diversification of our funding base through the investment of Agence Française de Développement to be spent on climate adaptation and mitigation infrastructure projects and the funding by Global Affairs Canada to be invested in projects that support gender advocacy will further strengthen shareholder confidence and help grow GuarantCo’s portfolio. This will enable us to achieve our strategic and development objectives with the associated positive impact to our external stakeholders and people in lower income countries across Africa and Asia who will benefit from the essential infrastructure projects that we finance.”

Notes to editors

About GuarantCo

GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development. www.guarantco.com

About PIDG

The Private Infrastructure Development Group (PIDG) is an innovative infrastructure project developer and investor which mobilises private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and south and south-east Asia. PIDG investments promote socio-economic development within a just transition to net zero emissions, combat poverty and contribute to the Sustainable Development Goals (SDGs). PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity and impact. Since 2002, PIDG has supported 171 infrastructure projects to financial close which provided an estimated 217 million people with access to new or improved infrastructure. PIDG is funded by the governments of the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Germany and the IFC. www.pidg.org

The Foreign, Commonwealth & Development Office (FCDO) has provided GuarantCo, a Private Infrastructure Development Group (PIDG) company, with an additional GBP 90 million callable capital facility to increase GuarantCo’s efforts to close the infrastructure financing gap in Africa and Asia through blended finance, local currency credit solutions and building local capital markets.

June 2021

The further GBP 90 million investment is in addition to the GBP 40 million callable capital facility that FCDO provided in 2016 and is part of the GBP 500 million which FCDO committed to PIDG in 2018 as a result of the British Prime Minister announcement to commit GBP 4 billion public sector investment in Africa over four years.

By leveraging the investment up to three times, GuarantCo will be able to mobilise a portfolio of up to GBP 270 million of guarantees, creating enhanced public sector investment impact. The local currency financing and the local capital market capability building that GuarantCo provides is crucial to sustainably support infrastructure development in lower income countries across Africa and Asia as they mainly rely on long-term revenues in local currency.  GuarantCo’s work will therefore significantly support essential local infrastructure and economies to the benefit of the population.

The further FCDO investment, in addition to the EUR 100 million funding as provided by Agence Française de Développement (AFD) in December 2020 and the CAD 40 million by Global Affairs Canada in April 2021, will provide increased capacity to grow and leverage GuarantCo’s portfolio.  This will enable the company to achieve its strategic and development impact objectives including developing local capital markets, growing economies and improving local people’s lives through essential infrastructure.

PIDG and its companies, including GuarantCo, are committed to focus their work on projects that are aligned with the Paris Agreement on climate change and the PIDG Gender Equity Action Plan.

James Duddridge, FCDO Minister for Economic Development, said: “We are excited to build on our long partnership with GuarantCo as a leader in local currency solutions, unlocking the finance for critical infrastructure to be developed in frontier markets across Africa and Asia in a sustainable and inclusive way. This support demonstrates the UK’s continued commitment to finding innovative solutions to mobilise finance towards the Sustainable Development Goals, partnering with the private sector to enable improved livelihoods in some of the world’s poorest countries.”

Emily Bushby, Interim CEO of GuarantCo, said: “We are delighted with FCDO’s additional funding which will make a significant impact to further our efforts to develop local capital markets and provide long-term, local currency credit solutions to finance life changing infrastructure projects to the benefit of local people.  Since 2005, GuarantCo’s innovative approach has made a significant contribution to lower income countries and fragile states across Africa and Asia which to date has resulted in the investment enablement of USD 5.6 million, improved access to infrastructure for 43 million people and job creation for 235,000 people.

Philippe Valahu, CEO of PIDG, said: “This latest funding commitment from one of our founding and largest public sector funders reinforces the confidence that FCDO has in PIDG and GuarantCo. FCDO has played a crucial role in the development of PIDG from its initial establishment through to the transformation of the group since 2002.  We highly value our partnership with FCDO to further deliver the much needed impact to people in Africa and Asia through financing of essential infrastructure.”

GuarantCo, through the Private Infrastructure Development Group Technical Assistance, and The Rockefeller Foundation have provided Acre Impact Capital with catalytic funding to make debt investments in infrastructure projects that provide access to essential services to vulnerable populations in Africa.

  May 2021

Leveraging the proceeds from the catalytic funding, Acre Impact Capital will launch a series of private debt impact investment funds focused on infrastructure sectors such as healthcare, education, social housing, transport, renewable power, agriculture, water & sanitation, waste management, climate adaptation and technology / digital infrastructure. By investing alongside long-established export credit agencies (ECAs), the funds will address a key financing gap in the market, unlocking transactions and mobilising up to USD 5.6 of capital for each dollar invested. The funds aim to achieve risk-adjusted market-rate returns, while minimising the risks often associated with developing infrastructure in emerging markets.

By originating transactions which are aligned with PIDG and GuarantCo’s development impact goals, Acre Impact Capital will allow ECAs to operate in support of the UN Sustainable Development Goals, while encouraging trade and job creation in their home countries. ECA finance is mostly arranged by a few international banks.  Acre Impact Capital will support the ability of local banks in Africa to operate in the export finance market, partnering and providing hard currency funding where needed. For borrowers seeking to manage foreign exchange risk, Acre Impact Capital will open opportunities for local currency co-finance which will be supported by GuarantCo, including GuarantCo’s tenor extension guarantees.

Lasitha Perera, CEO of GuarantCo, said: “This transaction is a great example of complementary public sector and philanthropic partnership joining forces to work together towards a common goal and where blended finance can mobilise commercial sources of finance to support the SDGs.  It demonstrates the strength of the PIDG group working closely together with The Rockefeller Foundation in order to deliver essential infrastructure to drive economic growth and sustainably build a more prosperous future for people in Africa who need it most.”

Maria Kozloski, Senior Vice President of Innovative Finance at The Rockefeller Foundation, said: “We are excited about the potential of Acre Impact Capital’s high impact and innovative strategy, which leverages the ECA market to mobilise largescale capital and address the huge financing gap for emerging market infrastructure.” 

Emilio Cattaneo, Director of PIDG Technical Assistance, said: “We are delighted to have been associated with the Acre Impact Capital project since its inception and to have supported the team in the development of such an innovative concept together with our friends at The Rockefeller Foundation. Through the use of  PIDG Technical Assistance funding, we are proud to have been able to contribute to the initial capital required to enable Acre Impact Capital to be launched which demonstrates the power of strong partnerships and collaboration in delivering sustainable infrastructure in the countries where we can make a real difference.” 

Hussein Sefian, Founding Partner of Acre Impact Capital, said: “We are thrilled to enter into a long-term partnership with aligned investors such as The Rockefeller Foundation and the Private Infrastructure Development Group, through GuarantCo, to advance Acre Impact Capital’s mission to provide access to essential services to underserved communities and contribute to reducing the infrastructure financing gap in Africa which is estimated to be over USD 100 billion a year. Our Export Finance funds will provide institutional and impact investors with exposure to a new asset class – export finance loans – while promoting the financing of sustainable and socially impactful infrastructure.”

Notes to editors

About GuarantCo

GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, and France through a stand-by facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development. www.guarantco.com

About PIDG

The Private Infrastructure Development Group (PIDG) is an innovative infrastructure development and finance organisation which encourages and mobilises private investment in pioneering infrastructure in the frontier markets of sub-Saharan Africa and south and south-east Asia to promote economic development and combat poverty. PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity and impact. Since 2002, PIDG has supported 157 infrastructure projects to financial close and provided 209 million people with access to new or improved infrastructure. PIDG is funded by six governments (the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Germany) and the IFC. www.pidg.org

About PIDG Technical Assistance

PIDG Technical Assistance (TA) can provide technical assistance and capital grants to the PIDG companies to meet a range of needs associated with an infrastructure project’s life-cycle. PIDG TA can also provide up-front viability gap funding grants to support PIDG projects that require concessional funding to make a project with strong development impact financeable.

About The Rockefeller Foundation

The Rockefeller Foundation advances new frontiers of science, data, and innovation to solve global challenges related to health, food, power, and economic mobility. As a science-driven philanthropy focused on building collaborative relationships with partners and grantees, The Rockefeller Foundation seeks to inspire and foster large-scale human impact that promotes the well-being of humanity throughout the world by identifying and accelerating breakthrough solutions, ideas, and conversations. For more information, sign up for our newsletter at rockefellerfoundation.org and follow us on Twitter @RockefellerFdn.

About Acre Impact Capital

Founded in 2019, Acre Impact Capital invests in growth-stage, climate-aligned infrastructure in emerging markets by partnering with leading commercial lenders and export credit agencies. Our Export Finance funds address the estimated $100 billion annual infrastructure financing gap in Africa, driving economic growth and providing essential services for underserved populations. By co-investing alongside well-established export credit agency partners, we aim to achieve risk-adjusted market-rate returns for our investors while mobilising up to 5.6x private sector capital for every dollar invested. Our strong relationships and partnerships with key players in the export finance ecosystem provide us with privileged access to a diverse pool of curated opportunities across Africa. To find out more, visit: www.acre.capital

Global Affairs Canada (GAC), a department of the Government of Canada, is providing CAD 40 million (c. USD 31.8 million) through a repayable contribution to Private Infrastructure Development Group (PIDG) company, GuarantCo, to enhance affordable and sustainable infrastructure credit solutions in low-income countries and fragile states across Africa and Asia. The funding will be used to finance essential infrastructure, develop local capital markets and help economies grow by mobilising additional capital towards the Sustainable Development Goals (SDGs) aiming to reduce poverty.

May 2021

The partnership will help to support PIDG’s and GuarantCo’s gender-responsive approach to infrastructure investment in alignment with Canada’s Feminist International Assistance Policy. PIDG and GuarantCo view the Canadian government’s strong gender advocacy as a significant benefit allowing PIDG to further enhance its gender policies and processes. GuarantCo contributes to the implementation of the PIDG Gender Equity Action Plan and the collaboration with GAC will further accelerate progress.

This initiative will help to demonstrate that investments in low-income countries and fragile states are not only possible but that they can mobilise significant additional private capital towards the SDGs to ensure sustainable and inclusive economic growth.

The Honourable Karina Gould, Canada’s Minister of International Development, said: “This initiative with GuarantCo is a key opportunity to address the financing gap in infrastructure in Africa and Asia by mobilizing  private sector investment.”

Emily Bushby, Interim CEO of GuarantCo, said: “We are proud that Canada has decided to invest in GuarantCo, particularly to support PIDG and its companies to further build and implement its gender equity agenda. The investment will enable GuarantCo to leverage this facility three times to mobilise a portfolio of up to CAD 120 million (c. USD 95 million) of guarantees. It will provide increased capacity to grow GuarantCo’s portfolio, enabling us to achieve our strategic and development objectives with the associated positive impact to our external stakeholders, including ratings agencies, to further diversify our funding base.”

Philippe Valahu, CEO of PIDG, said: “We are delighted that the Canadian Government is investing in GuarantCo. We are particularly pleased that this investment aims to enhance gender initiatives.  As a group, PIDG has developed a robust Gender Equity Action Plan which provides us with a roadmap for continuous improvement in our investments and in our companies. PIDG is adopting a deliberate climate and gender lens to screen both risks and potential of its infrastructure investments and we are looking forward to working closely together with GAC to accelerate gender inclusivity further the global gender agenda.”

Notes to editors

About GuarantCo

GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development. www.guarantco.com

About PIDG

The Private Infrastructure Development Group (PIDG) is an innovative infrastructure development and finance organisation which encourages and mobilises private investment in pioneering infrastructure in the frontier markets of sub-Saharan Africa and south and south-east Asia to promote economic development and combat poverty. PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity and impact. Since 2002, PIDG has supported 171 infrastructure projects to financial close which provided an estimated 223 million people with access to new or improved infrastructure. PIDG is funded by six governments (the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Germany) and the IFC. www.pidg.org

About Global Affairs Canada

Global Affairs Canada (GAC), a federal department of the Government of Canada, defines, shapes and advances Canada’s interests and values in a complex global environment. The Department manages diplomatic relations, promotes international trade and provides consular support. It leads international development, humanitarian, and peace and security assistance efforts. GAC also contributes to national security and the development of international law.

GuarantCo provided PRAN Agro, part of PRAN -RFL Group, with a 100 percent guarantee of a BDT 2.1 billion (c. USD 25 million) on-shore bond with a seven year tenor to attract domestic institutional capital from Bangladesh and support PRAN Agro’s expansion plans.

May 2021

GuarantCo, a Private Infrastructure Development Group (PIDG) company, enabled a pioneering and transformational structure for the bond realising various firsts for the Bangladeshi market: the first blended finance structured bond of its kind; the first to be subscribed by an international insurance company and the country’s first directly issued digitised bond under Private Placement of Debt Securities Rules; no development finance institution has ever guaranteed a bond of this kind in Bangladesh.

GuarantCo’s partnership with MetLife and Riverstone Capital has been instrumental in working with various stakeholders and regulators to execute the transaction that will have a transformational impact on development of debt capital market in Bangladesh.

The proceeds from the bond guaranteed by GuarantCo will enable PRAN Agro’s expansion plans including land development, construction, storage facilities and processing machinery. The expansion is expected to result in over 20 percent increased sourcing from local farmers, contributing to rural income and food security which is critical during the COVID pandemic and high on the Government of Bangladesh’s agenda. In a period where many people have lost their jobs, additional investment into PRAN Agro will also provide much needed job security to both current and future employees.

In Bangladesh, one of the world’s fastest growing economies over the last decade,  the agriculture sector is a key sector contributing to employment and share of GDP. A key part of PRAN Agro’s strategic plan is to meet increasing demand for processed agricultural products, both locally and overseas, and invest in both expanding its production lines and work force to grow the business in order to fuel economic growth in Bangladesh.

Emily Bushby, Interim CEO at GuarantCo, said: “We are proud to have closed our second transaction in Bangladesh and support the Government to make a contribution to the country’s growing economy and increasing demand for processing local and overseas agricultural products whilst providing employment for local people including women.  Given that no Bangladeshi company has ever raised any local currency bond financing with the assistance of a DFI and that Bangladesh has only had three listed bonds in the on-shore market, GuarantCo’s transaction with PRAN Agro will have a significant demonstration effect that will support the development of the debt capital markets. It will demonstrate another source of funding for businesses seeking to raise financing for infrastructure projects from which the local people in Bangladesh will benefit. GuarantCo is proud to have worked on this landmark transaction for Bangladesh and is grateful to policy makers in Bangladesh (BSEC, Bangladesh Bank and others) to have supported us all along despite a number of unforeseen circumstances most notably brought in by COVID pandemic.”

Uzma Chowdhury, CPA Director Finance at PRAN Agro, said “With the issue of this bond, PRAN Agro Limited has established an alternate source of funding that can attract investors to the Bangladesh capital markets.  Bangladesh, a nation of tremendous opportunity, is creating the investment opportunity with an innovative solution ensuring deeper financial markets, advancement of rural economy and enhanced sustainability. We thank our partners including BSEC, Bangladesh Bank and all other authorities for their support in achieving this milestone in the middle of the pandemic.”

Ala Ahmad, General Manager at MetLife Bangladesh, said: “MetLife’s investment in this landmark bond is testament to our confidence in the growth potential of Bangladeshi companies as well as MetLife’s unique expertise in advanced investment and portfolio management.”

Notes to editors

In April 2019, GuarantCo launched the findings of its Study of Bangladesh Bond Market at the Local Capital Market Infrastructure Financing Conference, co-hosted with the Dhaka Chamber of Commerce & Industry (DCCI) and attended by Mr. Salman F. Rahman, MP, Honourable Private Industry and Investment Adviser to the Prime Minister. The Bond Study, funded by PIDG Technical Assistance, was commissioned by GuarantCo to assess the challenges relating to an active bond market for infrastructure projects and to identify possible interventions that will enable the development of a vibrant bond market in Bangladesh.

After the financial close of the Technaf Solar Power transaction in May 2019, this is the second deal that GuarantCo achieved in Bangladesh.

About GuarantCo

GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development. www.guarantco.com

About PIDG

The Private Infrastructure Development Group (PIDG) is an innovative infrastructure development and finance organisation which encourages and mobilises private investment in pioneering infrastructure in the frontier markets of sub-Saharan Africa and south and south-east Asia to promote economic development and combat poverty. PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity and impact. Since 2002, PIDG has supported 171 infrastructure projects to financial close which provided an estimated 223 million people with access to new or improved infrastructure. PIDG is funded by six governments (the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Germany) and the IFC. www.pidg.org

About PRAN Agro

PRAN Agro Limited, a sister concern of PRAN-RFL group registered in 1999 under the Companies Act in Bangladesh for processing agro-produce items into packed food items by increasing shelf life of the produce. It is the largest player in the local market for culinary items which producing 100s of items from spices, candies, sauces, cereal bars, mustard oil, pickles, jam-jellies, etc www.pranfoods.net

About Metlife

MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates (MetLife), is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management to help its individual and institutional customers navigate their changing world. Founded in 1868, MetLife has operations in more than 40 markets globally and holds leading positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. www.metlife.com
MetLife Bangladesh is the leading international life insurer in the country serving over a million customers in Bangladesh. www.metlife.com.bd

Cardano Development group company Frontclear signed a Memorandum of Understanding (MOU) with The Uganda Retirement Benefits Regulatory Authority (URBRA) to support Retirement Benefits Schemes’ participation in money and secondary bond markets. This MOU complements that signed between the Bank of Uganda (BOU) and Frontclear in 2019 and the pivotal role Retirement Benefits Schemes play in government securities markets.

The MOU has a clearly defined work programme. A key objective will be to inform the review and reform of primary and secondary legislation towards creating a more conducive legal environment allowing for Global Master Securities Lending Agreement (GMSLA) enforceability. In addition, the project will develop market principles and operational guidelines to ensure prudential participation by Retirement Benefits Schemes and establish standards of best practice to manage any risks that may arise from such transactions. Lastly, it is complemented by legal and operational training towards effective operationalization of transactions.

The URBRA carries strong ownership for the project and recognises the importance of Retirement Benefits Schemes’ participation in securities markets. Retirement Benefits Schemes hold the lion’s share of government securities, which when ‘freed-up’ in the secondary market would greatly improve overall capital market efficiency and liquidity.

“Over 70% of the retirement benefits schemes assets under management are invested in government securities, with majority held to maturity which aligns to the long-term objective and nature of retirement benefits schemes. Beyond adequate returns, diversification of investments and security of benefits, retirement benefits schemes seek greater transparency, efficiency and integrity in both the primary and secondary markets. URBRA not only aims at
promoting the development of capital markets through RBS participation in the secondary markets but also at conducting regular assessments and reviews of investment activities in tandem to market standards of best practice.” Said CEO Martin Nsubuga, URBRA

“Across many Sub-Saharan African markets, pension funds often hold to maturity and can carry up to 70%/80% of a market’s public issuances. Responsibly removing the obstacles to pension fund participation in secondary bond markets, especially repo markets, benefits the financial system as a whole.” Said CEO Philip Buyskes, Frontclear

The Currency Exchange Fund (TCX) a Cardano Development group company has launched its first-ever frontier bond currency index (TCX FI). The informative index tracks the performance of frontier currency-linked, investment-grade Eurobonds, issued by (multilateral) development finance institutions such as the African Development Bank, EBRD, FMO, and the IFC. The TCX FI currently covers 77 bonds in 20 frontier currencies where TCX has acted as hedging counterparty to the issuer. During a 3-year back-testing, the index outperformed a comparable EM-currencies portfolio in risk-return and diversification terms.

The uniqueness of the index lies in its underlying exposure. It includes frontier currencies such as the Uzbekistani Som, Honduran Lempira, Tanzanian Shilling, and Vietnamese Dong, which are not covered by existing indices. TCX calculates bond price information from the valuation of the bond’s hedges outstanding in its books.

Frontier debt is gaining traction among investors looking for alpha generation and portfolio diversification. The asset class remains underinvested due to high illiquidity, perceived risk, and accessibility concerns. TCX has been set up specifically to provide currency risk protection to hard currency borrowers in countries where the market fails to deliver solutions.

The proceeds of the Frontier currency-linked Eurobonds fund institutions whose mission is to create impact in developing countries whilst applying the highest ESG criteria in the industry. Settled in euros or dollars, the bonds provide an accessible road to frontier currency exposure with minimal credit risk and no transfer and convertibility risk. The development of the index was made possible by the German Ministry of Economic Cooperation and Development, BMZ.