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NIBC closes USD 25m transaction for PrimaDollar

Corporate News -

TMT&S and Structuring are pleased to announce the closing of the USD 25m structured transaction for our new client PrimaDollar bringing their financing firepower to more than USD 100m per year.

Unique product

The alternative finance platform will use the funds provided by NIBC (USD 20m) and co-lender Advance Global Capital (USD 5m) to help SME exporters in emerging markets who have only limited access to finance. Via its unique product PrimaDollar provides SME exporters with financing from order to cash (i.e. even pre-export), while only taking insured credit risk against credit-worthy importers. At the same time it renders expensive letters of credit issued by large banks unnecessary, thereby considerably reducing financing costs for the exporters. This disruptive technology allows the exporters to scale their own business while being more independent of large European and American banks.

Help SMEs in emerging markets grow

In contrast to the developed world, there’s a lack of SMEs in low-income countries and the economy is concentrated on large enterprises. Providing working capital to SMEs helps them to grow and employ more people, thereby generating more economic activity and increasing wages. Together with strict CSR policies and the close relationship of PrimaDollar’s ground staff with the manufacturers, this facilitates growth and social impact in emerging markets. This is exemplified by the participation of Advance Global Capital, a social impact lender founded by an American philanthropist and former board member of Oxfam, that promotes financial inclusion in low-income countries.

The multi-currency facility is based on LMA standard while at the same time it has classic bankruptcy remote and asset-based features in line with international structured finance standards. These legal and structural innovations will form a template for a number of other deals going forward and will be well recognized in the structured and alternative financing markets.

This deal highlights yet another successful cross-border and cross-team cooperation within the bank.

PrimaDollar shared this press release about the transaction.

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