A select group of nine micro-lenders spread throughout seven countries tapped investors last month for a US$38 million transaction touted as the first CLO benefiting this business sector. Swiss consultancy BlueOrchard Finance and U.S. firm Developing World Markets arranged the deal. "They have the relationship with the microfinance institutions to pick out the cream of the crop," said Howard Finkelstein, an attorney at Buchanan Ingersoll, which advised the leads.

The structure is tiered in a typical senior/sub/equity fashion, with proceeds slated for new lending activity. Legal final maturity was seven years and average life was six. That matched the tenor of the collateralized credits, providing scarce long-term funding for the micro-lenders.

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