Washington, D.C., May 20, 2004—The International
Finance Corporation, the private sector arm of the World Bank Group, has
restructured $310 million in outstanding loans to Argentina’s Banco de
Galicia y Buenos Aires S.A. The restructured loans include $65 million
in loans for IFC’s account and a $245 million syndicated loan.
This operation is part of the general restructuring of Banco Galicia’s
outstanding debt of $1.34 billion equivalent. During the discussions,
IFC served as chair of the Ad Hoc Steering Committee of Banco Galicia’s
unsecured creditors. Banco Galicia is the largest private sector commercial
bank in Argentina in terms of assets ($7.4 billion as of February 2004)
and third in terms of shareholders’ equity ($448 million). The restructuring
is a critical step in the bank’s plan to improve its competitiveness as
it emerges from the difficult environment of the last three years.
Jyrki I. Koskelo, IFC’s director for Global Financial Markets, said, “Banco
Galicia has maintained a strong franchise and reputation during difficult
times in Argentina. By improving its capitalization and overall financial
profile, the restructuring strengthens the competitiveness of one of the
country’s leading banks, allowing it to pursue selective growth of its
business offerings in an improving economic climate.”
Bernard Pasquier, IFC’s director for Latin America, added, “The completion
of Banco Galicia’s restructuring is an important development for the private
sector in Argentina. Revitalizing the banking sector is one of the
crucial steps necessary for the sustainable recovery of the Argentine economy.”
Jonathan R. Hakim, IFC’s director of Syndications and Resource Mobilization,
said, “This is a very complex and significant restructuring. We
are pleased that we were able to work closely with a large group of B-loan
participants to achieve this result.”
In fiscal year 2003, IFC committed $1.8 billion to 54 projects in 16 countries
of the Latin America and Caribbean Region. This was an increase of $706
million from investment commitments made to the region during fiscal year
2002, and the largest amount committed by IFC to Latin America and the
Caribbean in recent years. The total IFC financing amount also included
$918 million mobilized from
banks participating in IFC syndicated loans.
IFC's financing to Latin America and the Caribbean accounted for almost
half of IFC's global funding to clients in fiscal year 2003, the latter
of which totaled $5.0 billion.
IFC's mission (www.ifc.org)
is to promote sustainable private sector investment in developing 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.
Since its founding in 1956 through the close of the last fiscal year
on June 30, 2003, IFC has committed more than $37 billion of its own funds
and arranged $22 billion in syndications for 2,990 companies in 140 developing
countries. IFC’s committed portfolio at the end of FY03 was $16.8 billion
for its own account and $6.6 billion held for participants in loan syndications.