Press Releases
print

IFC HELPS MEXICAN CHEMICALS PRODUCER TAP U.S. INSTITUTIONAL INVESTORS


Jannette Esguerra
Phone: (202) 458-5204
Fax: (202) 974-4384
E-mail: jesguerra@ifc.org


WASHINGTON, D.C., February 23, 2000 - With the help of financing from the International Finance Corporation, GIRSA, S.A. de C.V. (Girsa), a Mexican diversified chemicals producer, has obtained an investment grade rating that allows the company to tap U.S. institutional investors for the first time.
IFC is providing US$105 million towards a $240.6 million project to enable the company to make more specialized products and thereby improve its competitiveness in international markets. The investment includes a loan of $45 million for IFC's own account and a B loan of up to $60 million for the account of participants. The B Loan was privately placed by Crédit Suisse First Boston with a group of U.S. insurance companies. Duff and Phelps Credit Rating Company assigned a BBB- rating to the transaction (above Mexico's sovereign rating) based on Girsa's underlying credit quality and the preferred creditor status of IFC, which helps to substantially mitigate sovereign transfer and convertibility risk.
Girsa will use the financing to modernize, expand, and undertake an investment program to enhance global competitiveness in its business units, which include synthetic rubber, phosphates, consumer products, laminates, polystyrene, carbon black, phenol, and acrylic sheets.
This is IFC's second investment in Girsa. The first was to finance the company's improvements in environmental standards, close obsolete plants, and become a more efficient producer.
The project will provide Girsa with long-term financing that is not readily available to corporations in Mexico and will help ensure the company's continued viability in the global and increasingly competitive chemicals industry, said Rashad Kaldany, Director of IFC's Oil, Gas and Petrochemicals department.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.