Press Release
Monday, May 4, 2009
OPIC PROVIDES $200 MILLION FOR HOUSING AND SME LENDING IN CENTRAL AMERICA
WASHINGTON, D.C. – In an innovative project that combines traditional bank lending with a capital markets issuance in the United States, the Overseas Private Investment Corporation (OPIC) will provide $200 million in financing to support lending for housing and small and medium-sized enterprises throughout Central America.
The OPIC financing will comprise loans to subsidiaries of BAC/Credomatic Group, one of the leading financing institutions in Central America, in each of the region’s six countries: $60 million for Costa Rica; $47.5 million for El Salvador; $35 million for Guatemala; $37.5 million for Honduras; $12.5 million for Nicaragua; and $7.5 million for Panama. BAC/Credomatic provides a variety of business services in the region, including support for credit cards, housing loans, corporate clients and solutions for SMEs.
Citi, which acted as lead arranger for the transaction, is providing $25 million to the lending facility.
The facility is structured to provide long-term financing for up to 15 years; its main objective is to support housing finance and SME lending in Central America through traditional bank funding from Citi and OPIC funding provided through a capital markets issuance in the United States.
"This project will enable one of the leading financial institutions in Central America to provide long-term credit for both housing finance and SMEs - traditionally, two of the most important engines of economic growth worldwide," said OPIC Acting President Dr. Lawrence Spinelli. "OPIC is pleased to work with Citi and BAC/Credomatic Group to support a project with so many positive developmental benefits for the people of Central America."
Gijs Bert Veltman, vice president of Citibank N.A., said “This transaction with BAC/Credomatic Group is a landmark and unique transaction in Central America due to the amount committed and the legal structure in which seven jurisdictions were involved (six countries of Central America and the United States). We are proud of this achievement because even in a highly challenging economic environment, Citi continues offering innovation, efficient solutions and integrating the needs of each of the participating jurisdictions”
OPIC was established as an agency of the U.S. government in 1971. It helps U.S. businesses invest overseas, fosters economic development in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, and supports U.S. foreign policy. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers.
OPIC’s political risk insurance and financing help U.S. businesses of all sizes invest in more than 150 emerging markets and developing nations worldwide. Over the agency's 38-year history, OPIC has supported $188 billion worth of investments that have helped developing countries to generate over 830,000 host-country jobs. OPIC projects have also generated $72 billion in U.S. exports and supported more than 273,000 American jobs.