Local currency financing is a “hidden giant” for developing nation finance. On the “supply” side, there is over $5 trillion (assets) developing world pension funds, regulated insurance companies and investment funds which today are largely confined by regulation within their fixed-income activities to buying local T-bills or bank deposits at the risk-free rate. While there is already $145 Billion in annual issuance of bonds in AMF’s target asset classes in emerging nations around the world on the “demand” side, it is very difficult for these funds to be prudently invested in the development of essential public services and infrastructure without some level of credit enhancement.
As a financial guarantor focused on the developing world, AMF provides a solution by boosting high quality private and public sector debt to national-scale AAA status, thereby making this debt available to these local institutional investors, providing an increase in yield while complying with regulatory directives to invest in national-scale AAA fixed income instruments. AMF’s core business will be to guarantee, to local investors in emerging nations, timely repayment in local currency, of bonds and bank loans for essential public infrastructure and services financings in transportation; energy; housing; health care; education; microfinance and other consumer loan securitizations; corporate lease and small/medium enterprise loan securitizations; and sub-sovereign debt. The company has engaged in significant pre-launch marketing and already boasts a robust pipeline of transactions. AMF has projected 25% IRRs and has already assembled approximately $300MM in circled investment interest from two global scale private corporations and six US, European, Latin American and African development banks. It is seeking one or more additional private sector investors to balance the investor group and bring total capital to approximately $400MM.