First Housing Microfinance CDO In Works

HMF is working with Fitch Ratings to attain an investment-grade rating on its senior tranche, which would be unique among microfinance structured products. Having the investment-grade rating by a mainstream rating agency opens up investment to a much broader array of investors, the official said. Greg Kabance, senior director at Fitch, did not return a phone call.

Housing Microfinance Securities will also have the longest tenor of any microfinance structured product at 10 years. Previously, the longest tenor was seven years. Having a longer tenor is important in a housing transaction to make the larger loans more affordable, the official said. At the same time, the longer maturity exposes the deal to increased servicing, institutional, macroeconomic and political risks.

HMF was set up in 2005 by James Magowan and Dinos Constantinou with the backing of real estate investment banking and commercial mortgage brokerage firm Johnson Capital. Symbiotics, a Switzerland-based service provider for the microfinance industry, is the servicer, while Johnson Capital will place the senior notes. FMO, the Netherlands Development Finance Company, will underwrite the subordinated debt and provide local currency hedging. Officials at HMF declined comment.

Responsible editor Vincent Dufresne Symbiotics SA Information, Consulting & Services Rue de Lyon 75 1203 Genève T 022 301 73 07 F 022 301 73 09 info@symbiotics.ch www.symbiotics.ch
First Housing Microfinance CDO In Works