Borrower Overview
TriLinc has provided financing to a timber exporter located in southern Chile. This borrower is a sustainability-focused timber company engaged in the acquisition and processing of timber into wood chips and wood blocks for a large Tokyo-based Japanese conglomerate, who then distributes the raw material to companies that produce high quality paper and wood boards. The company primarily sources from local plantations and is Forest Stewardship Council-certified (FSC) by The Rainforest Alliance. The borrower estimates that it has directly or indirectly created 500 jobs in the region and expects that TriLic’s financing will allow the company to create more jobs in the coming years. The company, which was founded in 1991, has been a client of a TriLinc sub-advisor since 2005 and has consistently demonstrated steady top and bottom line performance. The facility is backed by collateral comprised of letters of credit issued by a major Japanese bank, as well as inventory.
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Market Overview
Chile is the sixth largest economy in Latin America and is classified as a middle income country by the World Bank.1 Real GDP growth in 2011 topped 5.9%, with average growth since averaging over 4%.1 Major export sectors include copper, fruit, fish products, paper and pulp, chemicals, and wine.
Chile meets TriLinc’s country standards for its performance across relevant growth, stability and access metrics.2 Chile leads the Latin America and Caribbean region in many stability and access rankings, including the World Bank’s Ease of Doing Business
rankings.3 Business-friendly policies, low levels of perceived corruption, and a stable macroeconomic environment are factors contributing to Chile’s distinction as the highest-rated sovereign debt issuer in the region, with S&P raising its rating to AA- inDecember 2012.4
Additional Sustainability & Impact Highlights
- The borrower provides high-paying jobs, paying an average wage of $39,190 USD compared to gross national income per capita of $12,280 USD in Chile.2
- For the fifth year in a row, the borrower has demonstrated its positive impact on the community by granting annual scholarships to low-income students.
- The borrower holds Forest Stewardship Council “Chain of Custody and Controlled Wood” certification, which means that its wood must come from responsibly managed plantations and producers that meet environmental and ecological standards.
1World Bank, Chile World Bank Indicators, 2013. 2There is no assurance that our investment in this company or this market will be successful or that it will have the desired impact. 3World Bank, Doing Business 2013. 4Reuters, December 2012.
The above information is as of the initial date of investment: July 2, 2013.
This borrower is no longer in TriLinc’s portfolio.
TriLinc originally performed an SDG mapping exercise in December 2017 to map all of our borrower companies, both current and exited from our portfolios, to specific SDGs based off of business activity. TriLinc’s official SDG alignment methodology was not finalized until June 30, 2018. For borrowers that had exited TriLinc’s portfolios prior to this time period, the selected SDGs for these borrower are a reflection of what TriLinc believes would have been the SDG alignment if 1) the SDGs had been in effect and 2) TriLinc had integrated the SDG alignment while the company was in the portfolio. The SDG mapping presented does not include input from Investment Partners or borrower companies given that the companies were no longer in the portfolio when the alignment was finalized.
RISK FACTORS
There is no guarantee that TriLinc’s investment strategy will be successful. Investment in a non-listed LLC involves significant risks including but not limited to: ownership is restricted; no secondary market; limitation on liquidity, transfer and redemption of ownership interest; distributions made may not come from income and, if so, will reduce the returns, are not guaranteed and are subject to management discretion. TriLinc selects investments and conducts operations on behalf of its clients, and will face conflicts of interest. Investment with TriLinc is not suitable for all investors. Securities Offered through CommonGood Securities, LLC, a member of FINRA and SIPC.
An investment with TriLinc carries significant fees and charges that will have an impact on investment returns. Information regarding the terms of the investment is available by contacting TriLinc. This is a speculative security and, as such, involves a high degree of risk. Investments are not bank guaranteed, not FDIC insured and may lose value or total value. Some investments may have been made in an investment vehicle that is no longer open for investment. The highlighted investment may or may not have been profitable. There is no guarantee that future investments will be similar.
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