IFC Supports Central America’s Banking Sector with $58.5 Million Syndicated Facility to Grupo Financiero Uno
Phone: (202) 458 5204
Washington D.C., May 15, 2006 The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement to provide a $58.5 million long-term syndicated facility to Grupo Financiero Uno, one of the leading financial groups in Central America. IFC’s financing will support the expansion and consolidation of the group’s operations in the region.
The facility consists of a $58.5 million syndicated loan, or B-loan, in which five international financial institutions have participated, including Cordiant Capital of Canada, J.P. Morgan of the United States, Natexis Banque of France, and RBTT Bank Limited and Republic Bank Limited of Trinidad and Tobago. IFC also provided from its own account a direct long-term financing for $30 million that was arranged previously.
IFC’s participation in this transaction provided the risk mitigation necessary to attract banks to longer-term financing in Central America. “This transaction is very significant for Central America, since it is the first time a domestic financial institution has received an unsecured syndicated loan with a tenor of more than five years” said IFC Vice President, Finance, Nina Shapiro. “This syndication’s success demonstrates how IFC’s B-loans can be effective tools to raise long-term international funding in emerging markets.”
IFC is committed to supporting Central American financial institutions as the region’s countries seek to increase their competitiveness in the face of accelerating globalization.
“IFC’s investment will constitute a signal of approval in the international market and help put Grupo Financiero Uno on a very competitive footing at a time when the recently signed Central America Free Trade Agreement is creating new opportunities and challenges for the private sector and the region’s governments,” said Atul Mehta, IFC’s Director for Latin America and the Caribbean.
Dr. Ernesto Fernandez Holmann, Chairman of the Board of Grupo Financiero Uno called the new agreement “a key step in promoting Central American risk with international banks for tenors exceeding those that could otherwise be raised by Central American financial institutions in international markets.” He added, “It also underlines the close cooperation that has developed between IFC and Grupo Financiero Uno.”
Grupo Financiero Uno provides, through a network of affiliated companies, retail banking, credit cards, insurance, and asset management services to more than a million retail customers in Central America. Today, it has operations in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama.
IFC is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit http://www.ifc.org/: www.ifc.org