WASHINGTON, D.C., Jan. 13—The International
Finance Corporation (IFC) has approved a US$110 million financing facility
for Banco Bilbao Vizcaya-México (BBV-México), the country’s seventh-largest
commercial bank. The financing package consists of a US$80 million Restructuring
Credit Line (RCL) and a US$30 million Subordinated Exchangeable Loan (SEL).
The RCL will enable BBV-México to provide financial and operational restructuring
assistance to medium-sized Mexican enterprises that face heavy debt burdens
resulting from the devaluation of the Mexican peso in December 1994 or
have been unable to obtain affordable long-term financing to carry out
modernization and expansion programs. Ten million dollars of the RCL are
specifically allocated for enterprises located in the Mexican states of
Oaxaca and Chiapas, where the shortage of long-term financing is acute.
IFC staff in Mexico will work closely with BBV-México in identifying and
restructuring client companies under the facility.
The SEL will serve as an injection of Tier II capital and thereby further
strengthen BBV-México’s capitalization. The SEL will be exchangeable for
common shares of Grupo Financiero BBV*Probursa (BBV*Probursa), the parent
of BBV-México, which is listed on the Mexico City Stock Exchange.
“This project reflects two of IFC’s top priorities in Mexico--strengthening
the banking system and supporting the middle-market sector,” said Mr.
Helmut Paul, Director of IFC’s Latin America and the Caribbean Department.
“Strengthening the capitalization of a major bank like BBV-México should
have an important demonstration effect for the banking system as a whole,”
BBV-México, which is 100 percent owned by BBV*Probursa, was the first bank
to be sold under the privatization of the Mexican banking system. IFC and
Banco Bilbao Vizcaya of Spain acquired about 12 percent of BBV*Probursa
in 1991, and Banco Bilbao Vizcaya has since increased its holdings to 64
percent, with IFC continuing as a minority shareholder. IFC is represented
on BBV*Probursa’s Board of Directors by Mr. Daniel F. Adams.
IFC is a member of the World Bank Group and is the leading multilateral
source of equity and loan finance for private sector projects in developing