GuarantCo provided a 100 per cent guarantee to a bond issuance platform (arranged by Symbiotics) that is mobilising capital from M&G Investments for a EUR 37 million loan to Valency International Pte Ltd, an agriculture-supporting infrastructure company.

The transaction will finance the construction of new warehousing, create a working capital facility to support cashew operations and refinance existing DFI debt utilised towards the construction of a cashew processing plant with private debt.

The bond issuance platform arranged by Symbiotics granted the loan to Valency and then repackaged it, benefiting from GuarantCo’s guarantee into a bond instrument that the investor subscribes to. In this instance the bond is externally rated with the same credit rating level as GuarantCo thus enabling full credit substitution. This repackaging, external rating and full credit substitution are key to enabling M&G Investments’ participation in the structure.

This is the first time GuarantCo has mobilised institutional capital from pension funds via the Symbiotics bond platform, providing a powerful template for replication in future transactions.

The proceeds of the bond issuance will be used to uplift the local processing of cashew produce in Côte d’Ivoire.

Côte d’Ivoire is the world’s largest cashew producer but currently processes only circa 30 per cent of its output in-market due to limited capacity, inadequate storage and financing constraints. Processing cashews adds value; by enabling an increase in local processing, this deal will support government targets to process 50 per cent of its cashews by 2030, promoting higher economic returns for the market.

This transaction is expected to benefit the local economy with increased export revenues of USD 360 million over the lifetime of the guarantee through the development and retention of higher-value elements of the supply chain. It will also support farmers with a circa 30 per cent forecasted increase in income generation through additional local sourcing.

The deal is aligned to the UN’s Sustainable Development Goals 2 – Zero Hunger, 9 – Industry, Innovation and Infrastructure, and 5 – Gender Equality, with over 30 per cent of job creation through the transaction expected to be for women.