Rabo India, in a landmark transaction, today announced the successful placement of Rs 25 crore worth of Commercial Paper of Spandana Sphoorty Financial Limited (SSFL) with a leading Mutual Fund. This investment by a Mutual Fund is significant for the microfinance sector as it subscribed to commercial papers of a Microfinance Institution on a standalone basis.
Rabo India Finance acted as Arrangers for the issue. Rabo India Finance provides a suite of financing and capital market products to enable Microfinance Institutions to access the debt and equity capital markets efficiently.
Announcing the transaction, Mr. Kaushik Modak, MD – Corporate Banking & Corporate Advisory of Rabo India Finance Ltd said, “We are delighted to have successfully closed this pioneering transaction for Spandana and aim to facilitate many more capital market transactions for them. The maturity of the microfinance sector provides the Mutual funds an alternative asset class for investments. We shall endeavour to do more innovative deals in the microfinance sector, a core sector for Rabo in India.”
“This would reduce the cost of borrowings and also invoke the interest of money market players into this sector, enabling the microfinance players to raise to the stature of Indian Corporate Houses. We expect to do more such deals with other investors in the days to come.” said Ms. Padmaja Reddy, MD, SSFL
Added Mr. Shiv Narain.Y.V – Vice President (Finance), SSFL, “We are the first MFI to do a completely unsecured standalone CP in the history of Asia which is subscribed by an Asset management company (AMC). This transaction has opened up a new asset class for investors enabling us to diversify our fund raising sources, tapping the Capital markets/Money Markets and creating a niche market for accessing low cost funds not only to the institution but also to the sector.”
Spandana is one of the more efficient Micro Finance Institution and the best rated MFI in India with a rating of "P1 on short term and “A- Stable outlook on long term" as assigned by CRISIL. It has already reached out to over 3.9 million clients with a portfolio of Rs 3,150 crore. Spandana aims at providing innovative financial solutions to the poor in a sustainable manner and to its credit has one of the lowest operating cost structures in Asia. Spandana emphasizes on sustainable focus oriented growth towards offering financial services to the un-served population of the country.
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This transaction opens up a new asset class for investors and would in future enable leading Microfinance Institutions to tap the capital market to diversify its funding portfolio. For mutual funds, the microfinance instruments offer high return investment opportunities in good quality assets as historically the delinquency level of Microfinance portfolio has been very low.
Notes to Editors
Established in 1998, Rabo India Finance Limited is a 100% subsidiary of Rabobank International. Through a wide spectrum of fund and fee based products and services, Rabo India offers sector specific knowledge-based customized solutions in the following core competencies: Food and Agribusiness, Renewable Energy and Carbon Credits, Corporate Finance, Private Equity, Capital Markets, Mergers & Acquisitions and Corporate Advisory, Trade and Commodity Finance and Microfinance. The company is backed by a local pool of intellectual and monetary resources as well as Rabobank’s global network. Rabo India is committed to partnering with clients in creating and providing innovative solutions to their business needs.
For more information about the Rabo India go to www.rabobank.com/india
Rabobank Group is a Netherlands based, international financial services provider operating on the basis of cooperative principles with a predominant focus on providing allfinanz services in the domestic market. Internationally the Group’s focus is on food and agriculture. In line with its cooperative roots, Rabobank Group is a cooperative bank, comprised of independent local Rabobanks, plus their central organisation Rabobank Nederland and its (international) subsidiaries. The organisation has more than 60,000 employees worldwide and operates in 46 countries.
Rabobank Group has the highest credit rating, Triple A, awarded by international rating agencies including Standard & Poor's and Moody’s. In terms of Tier I capital, the organisation is among the top 25 largest financial institutions in the world. Total assets amount to EUR 615 billion and a net profit toEUR 1.3 billion in the first half of 2009.
Internationally, the Rabobank Group operates specialized entities including De Lage Landen (leasing and vendor financing), Robeco Group (asset management), Rabo Real Estate Group (real estate management) and Sarasin (private banking).
For more information about the Rabobank Group go to www.rabobank.com