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IFC COMPLETES SECOND ASSET-BACKED SECURITIZATION IN MEXICO -- US$130 Million Financing Package for Grupo Industrial Bimbo


Rian Smith
Phone: (202) 473-6749
Fax: (202) 676-0365
Jeffrey Hooke
Phone: (202) 473-5284


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.