KIWANE

completed

This project will create the first emerging market local currency collateralized debt obligation (CDO) vehicle, securitizing loans and other ZAR denominated corporate debt held in the books of South African financial institutions. The project will have a significant development impact by stimulating the development of a local corporate bond market and reducing corporate lending rates through disintermediation. While South Africa''s government bond market is one of the largest and most liquid of any emerging market economy, the absence of a properly developed non-government (i.e corporate and municipal) bond market is notable. Pooling otherwise illiquid corporate debt through Kiwane, creates relatively liquid, highly-rated senior asset-backed bonds, which will offer an attractive investment instrument to domestic and eventually even foreign investors. Transparency of the Senior Bond’s performance and the trading spreads provide useful information, thereby improving the efficiency of the South African debt market. IFC''s role will be as a structuring investor in a junior or mezzanine tranche and provider of technical expertise. IFC''s analysis of the investment, due diligence, and our continued involvement in the project will help sponsors to structure the CDO to international standards.