MS Amlin and Mosaic provide credit coverage to 200 million euro Togo sustainable loan

By Rebecca Delaney

June 4 - (The Insurer) - A trio of Lloyd's market participants has supported a transaction by Legal & General (L&G) to mobilise a 200 million euro ($228 million) sustainable loan for the Republic of Togo.

MS Amlin and Mosiac Insurance, alongside credit and political risk insurance broker Texel Group, supported L&G's recent transaction.

Arranged by the African Development Bank, this marks Togo’s inaugural sustainable loan from international commercial investors, enabling the country to raise up to 200 million euros through a 20-year facility by L&G and Deutsche Bank.

The loan benefitted from a partial credit guarantee from the African Development Fund, the concessional lending arm of the African Development Bank.

In order to meet regulatory and risk requirements, L&G worked with the insurers for principal and interest insurance protection, enabling the firm to become the fund’s first non-bank beneficiary lender.

MS Amlin and Mosaic provided the insurance coverage through their Lloyd’s syndicates.

The transaction demonstrates the importance of driving institutional capital towards sustainable infrastructure development in emerging markets and developing economies to help close the annual funding gap of $4 trillion to reach the UN Sustainable Development Goals.

The collaboration between MS Amlin, Mosaic and L&G also indicates how innovative financing structures can be used to allocate to critical infrastructure in emerging markets and developing economies, allowing firms to capitalise on the potential for strong returns through credit enhancement.

Nick Oxley, MS Amlin’s lead underwriter for credit and political risk, said the "landmark" transaction highlights the role that specialist insurers can play in unlocking institutional capital for emerging economies.

"By mitigating risk, we can mobilise private investment for high-impact infrastructure projects that support development goals. This shows how insurers and asset managers can work together to close the infrastructure financing gap," said Oxley.

"This transaction is an example of how this experience has been used to extend support to a UK institutional investor. We look forward to structuring further insurance-backed transactions that have such a positive impact in the coming months," said Simon Bessant, global head of insurance at Texel Group.

Natalya Tyson, head of public and development finance, political risk at Mosaic, added: "In the midst of a geopolitical super-cycle and unprecedented volatility in the international trade and investment environment, it is especially meaningful to see British institutions coming together to champion stable, long-term, development-focused financing in Africa."