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IFC Mobilizes 11 Banks in $165 Million Syndication for Brazil’s Banco Daycoval


In Washington, D.C:
Adriana Gomez, IFC
Phone: +1 202 458-5204
Email:
agomez@ifc.org

In Brazil:
Morris Dayan, Daycoval
Phone: + 55 11 3138-0504
Email: morris@bancodaycoval.com.br


Washington, D.C., June 23, 2010 — IFC, a member of the World Bank Group, has arranged a syndicated loan of up to $ 165 million to Brazil’s Banco Daycoval S.A., with the participation of 11 international banks, to increase access to finance for small and medium enterprises in the country.  

This is the first syndicated loan for a mid-size Brazilian bank since the inception of the financial crisis in 2008. Mid-size banks are an important source of financing for SMEs in Brazil, which employ over two thirds of the 35 million formal jobs in the country.  Daycoval has been an IFC client since 2006.

The transaction involves a four year IFC $25 million equivalent local currency-indexed A loan and a syndicated loan composed of four tranches: two denominated in United States dollars for $110 million, and two denominated in Euros in the amount of € 23.5 million.  The syndicated loans mature in two and three years.  Ita Europa, Standard Bank and HSBC acted as Bookrunners and Mandated Lead Arrangers for the transaction, while IFC, Ita Europa and Standard Bank were responsible for the syndication process.

“This new IFC financing will help diversify Daycoval’s funding sources and increase its duration, while creating a robust base to maintain our support to Brazilian SMEs”, said Morris Dayan Investment Relations Director. “We confirm once again that IFC is a long-term partner to Daycoval. We believe that part of the success of this transaction was due to the bank’s conservative strategy and its solid capital structure”.

Participants in the syndication for the US dollar tranches are: Itau Europa, Standard Bank, HSBC, Calyon, Citibank, Oberbank, Santander and Standard Chartered.  Participants in the Euro tranches are WestLB, Commerzbank and ING.

“The syndication to Daycoval shows IFC’s capacity to mobilize resources for financial institutions that play a key role in economic development and job creation in Brazil,” said Andrew Gunther, IFC Country Manager in Brazil. “This capacity is particularly important during periods of market volatility”.

IFC’s strategy in Brazil focuses on promoting access to finance and developing capital markets to reach low-income individuals, microenterprises, and small businesses.  IFC seeks to strengthen infrastructure and public services, including health and education, by increasing private sector participation.  Other key areas include improving the investment climate and helping small businesses join the formal economy. IFC also promotes socially and environmentally sustainable practices, specifically in the Amazon region.  As of May 2010, IFC’s committed portfolio in Brazil was $2.4 billion.

About IFC

IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing capital for private enterprise, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit www.ifc.org.

About Daycoval

Banco Daycoval S.A. is a financial institution that specializes in the Middle Market segment and has significant activity in the retail business. Headquartered in So Paulo, it has 28 branches in 24 cities of 17 states across Brazil. In first-quarter 2010, its credit portfolio reached R$4.2 billion, with consolidated total assets of R$7.6 billion and net income of R$54.6 million. For 2009, Daycoval Net Income reached R$211 million. Daycoval pursues a conservative strategy and stands out for high liquidity and low leverage, as evidenced by its Basel II Ratio of 27.2% in March 2010.

In December 2009 the Brazilian Central Bank’s ranking of all private-sector banks put Daycoval in 13th place by shareholders’ equity and 30th by total assets less financial intermediation income. Daycoval has won important ratings, including an “A+” from Fitch Ratings, “brAA-” from Standard & Poor’s, all of which are national scale long-term ratings. On the Golbal Scale, for both rating agencies, Daycoval is rated BB for the Long Term.