Baker & McKenzie advised Citi Microfinance on its five year contract with AT Microloans I, which is a wholly-owned subsidiary of ACCION Texas, to buy up to $30 million in microenterprise loans, a first for the U.S. microfinance industry.
The deal will provide ACCION Texas the capital it needs to expand.
According to a release, ACCION Texas will become Citis service provider for the deal, handling underwriting, servicing and collections. Both Citi and ACCION Texas will share the risks of this community economic development effort.
Baker & McKenzie created the legal structure and documentation for the agreement.
Citi Microfinance works with microfinance institutions, networks and investors as partners and clients to expand access to financial products and services to individuals that are not reached or are underserved by financial institutions.
"This deal would not have happened without the innovative and extensive expertise Baker & McKenzie provided in the securitization area," said Robert Annibale, Citi's global director of microfinance. "They proved to be the perfect partner in this transaction, because they are committed to working with the microfinance sector and are as passionate about it as we are at Citi."
ACCION Texas, which was founded in 1994, is the U.S.s largest non-profit loan fund and has provided $70 million in more than 9,000 loans to more than 6,000 clients. Its mission is to provide loans to small business owners who cannot secure access to commercial credit, according to a release.