September.17.2013
A transactional team is assisting Accion in facilitating an investment into a nonbank finance company (the “company”) focused on providing credit to “affordable private schools” – i.e., schools that provide education to the poor and middle class of India.
There are estimated to be 250,000+ private schools in India with fees as low as a few dollars per month. Accion is interested in trying to make it possible to utilize its Bridge Guarantee Program to support a credit enhancement that would allow the Indian company to obtain local debt financing. The Bridge Guarantee Program allows Accion to obtain a standby letter of credit (“SBLC”) as a credit enhancement for (usually) a loan made by a local bank to one of Accion’s partner finance institutions. The SBLCs that are issued are backed by proceeds of loans made to Accion by its supporters.
The team supporting Accion’s innovative work in this area consists of New York banking and debt capital markets partner Patrick Flanagan, Washington, D.C. senior energy associate Dan Knepper and Washington, D.C. managing energy associate Ben Davidson.