Washington, D.C., February 19, 2009—IFC,
a member of the World Bank Group, has joined forces with two international
private equity firms and the Dayan family to provide financing of 410 million
reais (about $180 million) to Brazil’s Banco Daycoval S.A. to help it
increase lending to small and medium enterprises amid the global financial
This is the first long-term financing for
any Brazilian bank since global market conditions worsened last year.
The five-year, local currency, convertible
debt transaction, includes the participation of Cartesian Capital Group,
Wolfensohn Capital Partners, L.P., and members of the Dayan family.
IFC is providing 100 million reais under the transaction, which will help
diversify Daycoval’s funding base and allow it to increase lending to
existing and new clients. Many of those businesses have faced credit cutbacks
from other banks because of the crisis.
“The transaction demonstrates that significant
amounts of funding can still be raised from private sector investors for
sound, emerging-market banks,” said Morris Dayan, Director of Investor
Relations at Daycoval. “We are delighted to have worked with a respected
group of international investors to increase our capacity to provide needed
credit to borrowers in Brazil.”
Banco Daycoval is a leading midsize Brazilian
bank that specializes in the middle-market segment, and also has significant
retail lending operations. Headquartered in São Paulo, it has 27
branches in 22 cities and 16 states across Brazil, including many regions
underserved by other banks in the country. At the end of 2008, it had a
credit portfolio of 3.7 billion reais and total assets of 6.8 billion reais.
Atul Mehta, Director of IFC’s Latin America
and Caribbean region, said: "IFC
is pleased to be able to support Banco Daycoval with this investment. The
structure of this transaction allows Daycoval to lock in a considerable
amount of medium-term funding from investors who are eager to become its
shareholders. It also affords the bank greater flexibility to support the
business operations of smaller companies, which play an important role
in generating jobs and growth in Brazil.”
IFC has responded to the global financial
crisis with a series of innovative transactions and initiatives, including
bank recapitalization, and increased provision of trade finance, infrastructure
funding, microfinance, SME lending, and advisory services. The initiatives
are designed to ease the effects of the crisis on its emerging markets
clients – particularly in countries with large low-income population segments.