REQUEST FOR EXPRESSIONS OF INTEREST

CONSULTING SERVICES – FIRMS SELECTION

AFRICAN DEVELOPMENT BANK GROUP Financial Technical Services Division Syndication and Client Solutions Department

Rue Joseph Anoma, 01 BP 1387
Abidjan 01, Cote d’Ivoire
Email:fist2@afbd.org 

VERIFICATION AGENT OF A SYNTHETIC SECURITIZATION TRANSACTION

1. The Syndications, Co-financing and Client Solutions Department of the African Development Bank (the “Bank”) hereby invites investment banks, accounting firms, consulting as well as financial advisory firms (collectively, the “Consulting Firms”) to indicate their interest in the following Assignment: Verification agent of the Synthetic Securitization of the Bank’s Non-Sovereign Loan Assets. The Verification agent will assist the Bank and the investors in the verification of the events of default in the Synthetic Securitization Transaction (SST) of the Bank’s non-sovereign loan assets that the Bank is undertaking

2. The objective of the SST is to develop a replicable tool that can enable the Bank to effectively transfer credit risk on its portfolio of seasoned non-sovereign operations (NSO) by attracting private sector investor(s) to provide a junior tranche of portfolio credit risk enhancement. This will allow the Bank to reduce the “risk weight” attributed to its retained senior exposure in that portfolio, and by so doing lower the consumption of risk capital of the existing Non Sovereign Operations (NSO) portfolio.

It will also allow the Bank to meet its commitments to relieve the capital requirement of the Bank’s balance sheet by transferring risk using credit derivatives swap / financial guarantees and to manage the Bank’s risk capital more efficiently by sharing part of the risk on or non-sovereign portfolio with investors.

3. The services to be provided under the Assignment will include but not limited to:

• VA will obtain a confirmation from the Bank that the Reference Portfolio (RP) has been analyzed in accordance with the Bank’s standard credit policies and guidelines and pursuant to which a Bank Internal Scale Rating has been assigned;

• VA will agree that no Obligation or Entity of the RP is not on negative credit watch, has a current ongoing Credit Event or a Potential Credit Event at the Inclusion Date;

• VA will confirm the authenticity of the Reference Registry;

• VA will also obtain from the Bank a confirmation that the retention ratio agreed in the documentation is respected;

• VA will produce an Agreed Upon Procedure (AUP) and will report quarterly and on termination of the Risk Participation Agreement (“Quarterly Report”) the evolution of the RP;

• VA will also in the Quarterly Report confirm any Credit Event, Final Loss Amounts and Fallback Final Loss Amounts;

• Upon notice to the VA of a Credit Event in relation to a Reference Obligation, VA will perform all necessary procedures and, issue a Credit Event Verification Report in accordance with the terms of the Risk Participation Agreement;

• VA will confirm the Total Recoveries in respect of that Defaulted Reference Obligation; and VA will confirm the Final Loss Amount in respect of that Defaulted Reference Obligation;

• VA will re-perform the calculation of the Fallback Loss Amounts of the Defaulted Reference Obligation at a specific point in time upon request.

3. The Syndications, Co-financing and Client Solutions Department invites the Consulting Firms to indicate their interest in providing the above-described services. Interested eligible Consulting Firms shall provide information on their qualifications and experience demonstrating their ability to undertake this Assignment (documents, reference to similar services, experience in similar assignments, availability of qualified staff etc.).

4. The eligibility criteria for the establishment of a short list of Consulting Firms and the selection procedure shall be in conformity with the Bank’s Rules and Procedure for Corporate Consultants. The bank will share a Request For Proposal with the shortlisted Please, note that interest expressed by a Consulting Firm does not imply any obligation on the part of the Bank to include him/her in the short list.

5. The estimated duration of the services is approximately 4 years and the estimated starting date is 20th August 2018.

6. Interested Consulting Firms may obtain further information and clarifications from fist2@afdb.org.

7. Expressions of  interest  must  be  submitted  to:  Client  Solutions  Division,  Email: fist2@afdb.org with a copy to Max Magor Ndiaye, Email: m.m.ndiaye@afdb.org and must be received no later than 2 August 2018 at 17:00 local time and specifically mentioning:Verification Agent of the Synthetic Securitization of the Bank’s Non-Sovereign Loan Assets.