WASHINGTON, D.C., Feb. 7 -- The International
Finance Corporation (IFC) has completed a US$130 million financing agreement
with Grupo Industrial Bimbo, S.A. de C.V., a Mexican producer and distributor
of bread products. The package includes a US$25 million loan for IFC's
own account and US$105 million in asset-backed certificates sold in a private
placement to seven major U.S. and Canadian life insurance companies, with
J.P. Morgan Securities and ING Securities acting as agents for the sale.
The certificates were rated as investment-grade (A-) by Standard &
Poor's. IFC inaugurated this financing mechanism last year to access new
sources of long-term investment capital for its client companies. The inaugural
transaction, was structured on behalf of cement producer Apasco S.A. de
CV. "IFC is pleased to have concluded its second investment in Mexico
using the asset-backed certificate financing structure," stated Jeffrey
Hooke, the project's Investment Officer. "This IFC financing mechanism
expands the access of Mexican companies to the U.S. private placement market
and enables them to obtain longer maturities than with conventional bank
loans." Prior to the peso devaluation of December 1994, Mexican corporations
regarded as good credit risks typically obtained debt financing of 3-5
years from the Euromarkets. Since then, even good-quality companies have
had difficulty issuing debt with maturities longer than six months. Daniel
F. Adams, Vice President for Operations, added, "This special trust
structure provides an innovative and potentially very effective solution
to the growing demand for long-term capital in emerging markets. IFC's
ability to expand its single asset-backed securitization mechanism demonstrates
the appeal of this instrument in the marketplace, and we will continue
to look for opportunities to employ it with other companies elsewhere in
Latin America and throughout the developing world." IFC, a member
of the World Bank Group, is the leading multilateral source of equity and
loan finance for private sector projects in the developing world.
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