Citigroup Inc. has said it plans to sell a $165 million collateralized debt obligation backed by 30 microfinance loans to entrepreneurs in 13 countries, including Bosnia, Tajikistan, Mexico, and El Salvador.
Citi will also invest in the lowest-ranking, or equity, portion of the CDO along with International Finance Corp., a unit of the World Bank, according to Fitch Inc. Microlenders make loans to low-income borrowers in developing countries who may struggle to get credit from local banks.
The Citigroup CDO will consist of six portions of debt; the highest is rated AA.
Morgan Stanley sold the first microfinance bonds with credit ratings in May, and Deutsche Bank has arranged an $86 million CDO.
The Citigroup CDO will close in January, according to the Fitch report.
