IDB Invest, a member of the IDB Group, has provided a $40 million warehouse line of credit to Fondo de Inversión Privado Sartor MHE, a private investment fund in Chile structured for this transaction, seeking to help improve funding access for local micro, small and medium enterprises (MSME).
Photo: IDB Invest
The proceeds of the warehousing line will be used to purchase and accumulate endorsable mortgage loans originated by Creditú Administradora de Mútuos Hipotecarios S.A. (part of AVLA S.A.) and insured by AVLA Seguros de Credito S.A., for a future asset backed securitization in the Chilean local capital markets. The line is expected to support several securitization cycles and has a maximum availability period of 6 years.
The warehouse facility will support and improve MSMEs access to financing in Chile through an innovative credit insurance product that AVLA S.A. offers to its MSME clients, which allows them to access more competitive funding costs. Moreover, the financing is expected to allow for more favorable terms and more efficient loan structures for the borrowers, consequently expending the available liquidity in the Chilean MSMEs ecosystem during the COVID-19 pandemic.
Additionally, the project will support several future MSME loan ABS issuances, enabling the creation of a new asset class in the Chilean capital markets that eventually contributes to the allocation of institutional money for small and medium enterprises.
This transaction contributes to three United Nations Sustainable Development Goals (SDGs): Decent work and economic growth (SDG 8), Industry, innovation and infrastructure (SDG 9), and Responsible consumption and production (SDG 12).
This article was originally published by IDB Invest.
