The firm took on four more significant engagements as part of the Firm’s social sector finance initiative.
First, a team is representing Building Markets, a nonprofit organization, which builds markets, creates jobs and sustains peace in developing countries by championing local and poor entrepreneurs and connecting them to new business, in setting up a loan guarantee fund. The aim of the fund is to encourage the provision of loans by banks to local small and medium enterprises (SMEs) in two countries, Liberia (identified by the donors) and a second country to be determined by the end of the year. By supporting SMEs in Liberia (and the other to be identified country), Building Markets’ goal is to increase local employment and encourage development of the business sector in the countries. The initial legal work will consist of advising Building Markets whether it is required to create a new corporate structure in New York for the fund, and to work with local counsel in Liberia on that country’s registration process if it is required at all. The client anticipates negotiating with local banks by the end of this month, with the fund hopefully to launch by April 1, 2013. The team consists of New York public finance partner Eileen Heitzler, New York managing public finance associate Sarah Rackoff, New York corporate associate Elena Sauber, pro bono fellow Eliza Golden and New York senior tax associate Andrea Ball.
A second team is advising SharedImpact, a nonprofit organisation which is trying to develop a secondary market for social investment products (e.g. social impact bonds and more generally pay for success contracts). The client is in the process of establishing an online platform in both the United Kingdom and the United States which can be used to trade social investment products which is described as being “the Amazon.com of social investment.” SharedImpact has already structured their business in the United Kingdom and the Orrick team, consisting of New York senior tax associate Andrea Ball, New York managing energy and infrastructure associate Sam Headon, pro bono fellow Eliza Golden and San Francisco tax partner Grady Bolding, are providing the client with initial structuring and regulatory advice, with the aim that the client will be able to conduct their activities in the United States.
Third, a team is representing long-standing client, Calvert Foundation – a nonprofit that offers community investment notes that fight poverty, finance affordable homes, fund small and micro businesses and engage in community development – in connection with an increase in funding to one of the client’s largest borrowers. The borrower is a Belgian based group that is lending to microfinance organizations and fair trade producer organizations (mostly coffee and cocoa). The Orrick team, consisting of New York banking and debt capital markets partner Julian Chung and New York banking and debt capital markets associate Julie Eum, will allow CF to upsize and restate the promissory note with the borrower as a credit agreement.
Fourth, and finally, M&A and private equity partner Jim Mercadante and managing corporate associate David Ruff are representing CHF International – a development nonprofit organization that works closely with communities worldwide to bring about sustainable changes that improve the lives and livelihoods of the vulnerable – as it continues the process of establishing a holding company, Vitas, for its transformed microfinance institutions (“MFIs”). The idea is to separate CHF’s microfinance activities, which use mostly debt and equity financing for loan capital, from CHF’s economic and humanitarian activities, which are mainly funded by donor contributions. Over the next several months, Vitas is expecting to close several investment-related transactions for its subsidiaries. The subject of the immediate work is shareholder agreements for two MFIs in Jordan and West Bank/Gaza, in which Vitas will be a co-investor with CHF.