MICROCAPITAL BRIEF: The International Finance Corporation (IFC) Arranges $135m Syndication for Banco Fibra of Brazil in Cooperation with Banco Itau Europa and Banco Santander

The International Finance Corporation (IFC), the private sector arm of the World Bank Group, recently arranged USD 135 million in syndicated lending for Banco Fibra, a Brazilian bank that reported 2009 total assets of BRL 11.8 billion (USD 6.7 billion). The IFC, a 7.9 percent stakeholder in Banco Fibra, raised much of the funds through Banco Itau Europa of Portugal and Banco Santander of Spain. Through this deal, Banco Fibra aims to expand its services for small and medium-sized enterprises (SMEs) in Brazil.

Of the USD 135 million, USD 15 million are loans from IFC’s account, while the remainder consists of two tranches of syndicated loans from a consortium of 11 international banks: a US dollar denominated loan totaling USD 96 million and a euro denominated loan totaling EUR 20 million (USD 26 million).

“IFC is pleased to continue strengthening its partnership with Banco Fibra by helping diversify its funding sources and positioning it as a strong player in Brazil’s financial sector,” said Andrew Gunther, IFC Country Manager for Brazil. “Through this partnership, IFC supports Fibra?s role in addressing the financial needs of small and medium enterprises and other niche markets in Brazil.”

About The International Finance Corporation (IFC):

A member of the World Bank Group, the International Finance Corporation (IFC) uses loan and debt securities, equity investments and guarantees with the intent of alleviating poverty. It invests in financial institutions and other companies in emerging markets as well as providing technical assistance. The IFC has 182 member countries that ‘collectively determine its policies, and approve investments.’ As of 2009, IFC’s new investments totaled USD 14.5 billion.

About Banco Fibra:

Banco Fibra is a Brazilian bank that was established in 1988. Banco Fibra primarily offers credit services. Its subsidiary, CREDIFIBRA, offers products such as direct consumer credit (CDC), payroll deduction loans and mortgage loans. It is controlled by the Vicunha Group of Brazil. Since June 2007, the International Finance Corporation (IFC), the World Bank’s private sector financing arm, has been a shareholder of Banco Fibra with a 7.9 percent share of capital stock. As of 2009, Banco Fibra reported total assets of USD 6.7 billion.

About Banco Itau Europa:

Banco Itau Europa is an investment bank that operates primarily in Brazil and Europe. It was established in 1994 and is headquartered in Lisbon, Portugal. The company’s activities principally focus on private banking, financing exports between Brazil and Europe, offering advice and finance to European institutions investing in Brazil and international cash management. Its operations also include participating in syndicated loans to European companies. Banco Itau Europa was formerly operated as a subsidiary of Itausa Portugal Sociedade Gestora De Participacoes Sociais. As of November 28, 2008, Banco Itau Europa SA operates as a subsidiary of Itau Unibanco Holding SA. Banco Itau Europa reported total assets of USD 16.4 million as of 2009.

By Matthew Fox, Research Assistant

Sources and Additional Resources:

IFC Press Release 29 July 2010: http://www.ifc.org/IFCExt/pressroom/IFCPressRoom.nsf/0/412982F7529D161E8525776F00579184?OpenDocument

MicroCapital Universe: The International Finance Corporation (IFC): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+(IFC)

MicroCapital Universe: Banco Fibra: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Banco+Fibra

MicroCapital Universe: Banco Itau Europa: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Banco+Itau+Europa
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