37035 - DARP Global AGM

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Summary of Investment Information

Project Number

37035

Company Name

Seta Holdco S.A R.L.

Date SPI Disclosed

Apr 21, 2016

Country

World Region

Region

Global

Projected Board Date

May 26, 2016

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Nov 30, 2016

Department

Products Clients and Innovation

Industry

Financial Markets

Previous Events

Approved : Jun 9, 2016
Signed : Nov 11, 2016
Invested : Nov 15, 2016

Sector

Distressed Assets SPV

Project Description

The project consists of establishing a global DARP facility to buy pools of non-performing loans (“NPLs”) in several emerging markets (“EMs”). This facility will be funded by IFC and by one or more funds or other investment vehicles managed by affiliates of Apollo Global Management, LLC (“Apollo”) (the “Project”).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	462.50
Equity	37.50

Development Impact

- Capital relief. The Project will enable financial institutions to offload their NPLs, strengthening their balance sheets, freeing up capital and generating liquidity and capacity to originate new loans.
- Market transparency. As financial intermediaries increase the sale of NPLs to private investors, the transparency of these institutions'' balance sheets improves, as these assets are priced according to market conditions.
- Access to finance. The Project will facilitate the normalization of obligations of households and small and medium enterprises ("SMEs"), preventing a large number of them from losing their assets, regaining access to formal credit, and preserving jobs.

- Market support. The vast number of opportunities for NPL investments in the US and Western Europe have significantly crowded out other regions, including EMs. In addition, most EMs are now immersed in a highly uncertain macroeconomic environment. As such, IFC''s participation in the Project will send a strong signal, by supporting the development of secondary DA market and proving that transparent transactions are possible.
- Provision of countercyclical liquidity. IFC will continue to provide liquidity for DA investments when liquidity is scarce for this type of investment.
- Catalyze private sector investment. Apollo is a leading investor in the DA space. It will further demonstrate the attractiveness of this asset class to private sector investors. In addition, the Project will add visibility to the DA investment opportunities in EMs.
- Best practices and replicability. The Project will continue to support best practices for NPL resolution via IFC''s servicers or other new servicers that could potentially be retained in certain markets.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
CORE - E and S Management Systems (Y/N)	Compliance/Enhancement		Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The Project will support the acquisition and servicing of portfolios of NPLs. Considering that the target assets are retail and SME NPLs, the project is categorized as FI-2 in accordance with the 2012 IFC Sustainability Framework. As part of this project, the SPV will require that each servicer develop or have a system in place to manage the environmental and social (“E&S”) risks of the assets under its management in accordance with IFC Exclusion List and country E&S laws and regulations. In addition, the servicers will also be required to follow Performance Standard 2 on Labor and Working Conditions and regularly report E&S performance of the managed assets. Lapithus Management SARL (“Lapithus”), an affiliate of Apollo, will provide a consolidated report according to the format to be agreed with IFC.

Task Title & Description	Actual Due Date	Status	Comments	Completion Date
Nominate officers		Overdue
Establish SEMS		Overdue
Staff Training		Overdue
S&E systems in investee institutions		Overdue
Other1		Overdue

Contacts

For Inquiries About the Project, Contact

Jamshid Ehsani
Global Head of Principal Structured Finance
Apollo Capital Management, L.P.
9 West 57th St., New York, NY 10019
Tel: +1 (212) 822-0660
Email: mailto:jehsani@apollolp.com

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