Project detail - FRONTIER CLEARING CORPORATION B.V.

FRONTIER CLEARING CORPORATION B.V.

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Who is our client

Frontclear is an Amsterdam based financial markets development company that facilitates access for financial institutions in developing countries to local and global interbank markets through the provision of credit guarantees to cover the counterparty credit risk. Frontclear is part of the Cardano Development – a group focusing on developing innovative financial risk management solutions and also involved in, among others, the TCX and GuarantCo funds. Frontclear‘s investors include a number of European development finance institutions, including the European Bank for Reconstruction and Development (EBRD), Proparco, The Currency Exchange Fund (TCX), the UK Department of International Development (DFID, through the Financial Sector Deepening Africa) and German Federal Ministry for Economic Cooperation and Development (BMZ).

Funding objective

The Funding objective is to strengthen Frontclear's capital structure -in particular its Junior Notes tranche.

Why we fund this project

The investment allows Frontclear to enhance its capital structure, enabling the company to be efficient and to continue supporting the development of more inclusive and more liquid interbank markets in emerging and frontier economies. Frontclear is a niche-player with a unique proposition that has proven to be scalable. In the three years of operations, Frontclear has extended its reach to twelve countries across Africa, Asia and Latin America. Frontclear’s product offering is also complementary to FMO since it is highly beneficial to many of our financial institutions clients: whereas DFIs provide long-term financing, Frontclear offers short term money market solutions. Finally, Dutch interest is clearly represented in this transaction.

Environmental and social rationale

Environmental and social categorization is 'Low risk' in accordance with FMO’s Sustainability Policy. Frontclear's guarantee activities of money market instruments are deemed to have limited adverse environmental and social risks and/or impacts. Frontclear has an E&S policy in place applying to its relationships with beneficiary banks.

More investments

Date Total FMO financing
2/13/2017 USD 30.00 MLN
Country
Global
Sector
Financial Institutions
Signing date
12/2/2019
Total FMO financing
USD 30.00 MLN
Fund
FMO
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)
C