IIX Women's Livelihood Bond Case Study

Convergence

The Impact Investment Exchange’s (IIX) Women’s Livelihood Bond (WLB) is an innovative development finance instrument that mobilizes private sector capital for development impact by pooling loans to social enterprises into a public debt security. The USD 8M, four-year bond is listed on the Singapore Exchange (SGX) and will pay a semi-annual coupon to bondholders. The bond proceeds were lent to three underlying borrowers focused on empowering women through sustainable livelihoods in Southeast Asia. The WLB benefits from a blended capital structure, mitigating risk through a USD 500K first-loss tranche and a pari passu guarantee of 50% of the loan principal.

Launched in 2017, IIX spent approximately two years designing, structuring, listing, and fundraising for the WLB. During this time, the size and structure evolved significantly, adapting to and managing important challenges around innovation, including right-sizing the risk mitigation mechanisms, and investor outreach and education. The WLB uses existing capital markets instrument to achieve impact in an innovative way and is a key development for impact investing in Asia.

The WLB’s design and fundraising experience present useful insights for others considering structuring or investing in similar structures:

  • Gender-lens investing is an emerging trend
  • Multiple layers of concessional capital may be required
  • Blended finance structures are complex
  • Knowledge of target investors is important for positioning attractive investment opportunities Blended finance or not, innovation is costly
    Date
    21 February, 2018
    Type
    Case Studies
    Region Focus
    East Asia, South Asia, Southeast Asia
    Sector Focus
    Financial Services
    Sub-Sector Focus
    Insurance, Microfinance / Retail Banking