Sao Paulo, Brazil, January 25, 2006
– The International Finance Corporation, the private sector arm of the
World Bank Group, has completed its first trade transaction for a Brazilian
exporter under its Global Trade Finance Program, with HSBC Bank Brasil
originating the deal.
The Brazilian exporter, HSBC’s client,
shipped buses to Nigeria under an import letter of credit totaling $9.825
million issued by a local Nigerian bank.
“HSBC was founded 140 years ago to
facilitate trade between growing economies, and Trade has remained a core
part of its business ever since. It is therefore apt that HSBC should be
the first bank in Brazil to close a deal with IFC’s GTFP,” said John
Nicholls, Head of Trade and International for HSBC in Brazil.
HSBC confirmed the three-year deferred
payment credit with the support of IFC, which issued its payment guarantee,
thus providing risk mitigation on both the country and commercial risks
associated with the issuing bank.
Eric Striegler, Head of Structured and
Corporate Banking Trade Finance, who runs HSBC Bank Brasil’s team of trade
structuring specialists, said, “HSBC will use the Global Trade Finance
Program to enhance its already strong position as a leading edge innovator
of trade finance solutions in Brazil. HSBC and IFC are extremely keen to
explore opportunities to work with other Brazilian exporters to Africa,
Middle East, Asia and other parts of Latin America.”
The Global Trade Finance Program supports
trade by offering payment guarantees of up to three years on the risks
taken with bank counterparts in emerging markets worldwide.
”This HSBC trade involved shipments
of buses, but there are also significant volumes of other goods from Brazil
that are being sold to the African continent – and not just to Nigeria,”
said Antonio Neto, an IFC trade specialist. “The growth prospects
for the Global Trade Finance Program are strong in Latin America as the
program broadens the bank network of risk mitigation that it can provide
Saran G. Kebet-Koulibaly, IFC’s country
manager for Brazil, also noted that IFC’s partnership with HSBC fits with
the Corporation strategy in Brazil to support competitiveness of export-oriented
companies, a powerful engine for sustainable growth and job generation
in the country.
The Global Trade Finance Program began
operations on September 30, 2005. In its first three months it booked
70 transactions with an average tenor of five months and a total volume
of $63 million. Transaction sizes have varied from $10,000 to $10
million. About 75 percent of the deals supported the small and medium
enterprise sector, which is a vital source of job creation and a strategic
focus for IFC.
The program has 15 issuing bank members
so far, as well as 42 international confirming banks. The issuing
banks are in Argentina, Bangladesh, Bolivia, Kenya, Lebanon, Malta, Mauritania,
Nigeria, and Pakistan. “There are additional banks ready to join
in Argentina, Brazil, the Dominican Republic, Paraguay, and Uruguay. Other
target countries in Latin America include Colombia, Ecuador, Guatemala,
Jamaica, Peru, and Venezuela,” Neto added.
IFC in Brazil
During fiscal year 2005, Brazil received
the largest amount of IFC financing, in dollar value, among Latin American
countries. IFC invested $591million, including $190 million in syndications,
in sectors ranging from agribusiness and transportation to manufacturing
and the financial sector. IFC’s total portfolio in Brazil was $913
million at June 2005.
IFC's strategy for Brazil focuses on
enhancing clients' prospects for competitiveness and growth, improving
the country's social equity through voluntary actions by the private sector,
and continuing to promote sustainability. Since 1956, when Brazil
joined IFC, the Corporation has provided $7.45 billion, including syndications,
for 162 companies.
The International Finance Corporation
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,
With more than 1,600 branches covering
all Brazilian states, HSBC Bank Brasil is a wholly owned subsidiary of
HSBC Group, one of the largest banking and financial services organizations
in the world, with well-established businesses in Europe, the Asia-Pacific
region, the Americas, the Middle East and Africa. Headquartered in
London, HSBC Group has total assets of $1,467 billion (at 30 June 2005),
more than 260,000 employees and more than 9,700 offices and branches in
77 countries and territories.