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Virgine Falourd
Iroko Securities Ltd
Tel: 0207 002 1022
ISR - October 2005

Iroko securities, a London-based financial services provider specialising in sub- Saharan African debt, has launched the first structured note programme to repackage assets originating from the region. The US$500m SPHYNX Capital Markets PCC entity is also the first SPV established as a Mauritian protected cell company (PCC).

The first transaction originated under the programme - a US$20m repackaging of Ghanaian promissory notes - closed last month.

There have been one-off deals from the region before but no programmatic issuance, according to Colin Mercer, partner at Gide Loyrette Nouel, which acted as English legal counsel on the deal. "As well as cutting execution costs, the impetus to establish the programme lay in munimising custody and settlement issues in order to allow a broader range of investors to access the attractive yields offered on African credit risk.

Historically, one of the problems with African deals has been uncertainty about the trustworthiness of custodians," he says. But this issue has been clarified for the SPHYNX vehicle by getting Standard Bank on board as trustee.

The programme is also the first to take advantage of the PCC legislation that was established in Mauritius this year. Most offshore jurisdictions ate adding such structures to their armoury of structured finance solutions, following their introduction in Guernsey in 1998. PCCs reinforce the contractual ring-fencing central to all multi-issuance secured note programmes.

While promissory note deals are fairly common from sub-Saharan Africa. Mercer says another likely asset class to be securitised through the programme is trade receivables - although in reality any financial asset could be used.

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