Washington, D.C., June 27, 2003—The
International Finance Corporation, the private sector arm of the World
Bank Group, and Banco de Oro have established the $62.5 million Risk Sharing
Facility to expand financing and medium to larger companies. The facility
aims to provide loans with longer terms than those traditionally available
from Philippine commercial banks, opening new opportunities for companies
to expand production and improve the efficiency of their businesses.
Under the terms of the facility, Banco de Oro will provide loans to clients
directly over the next three years. IFC will guarantee 32 percent of each
new loan originated by Banco de Oro, up to a maximum total exposure of
“This transaction provides IFC with an excellent opportunity to work with
a leading Philippine banking group, and an existing client, to address
a major problem facing businesses in the country: access to medium- to
long-term financing,” said Karl Voltaire, IFC director of global financial
markets. Javed Hamid, director of East Asia and the Pacific, added, “IFC
is committed to helping companies in Asia find new financing solutions
so that they can more effectively compete, expand, and contribute to economic
“We are glad to be working with IFC to launch this facility to enable
the bank to increase the size and the maturity of our debt financing to
borrowers,” said Nestor Tan, President of Banco de Oro. He added, “The
facility will help our borrowers gain access to medium and long-term financing,
and therefore improve and expand their operations.”
Banco de Oro is the fifth largest domestic private bank in the Philippines.
BDO’s largest shareholder is the SM Group of companies, one of the leading
diversified business groups in the Philippines. BDO made an initial public
offering of shares in May 2002 and is today owned institutional shareholders
as well as public shareholders. Banco de Oro was cited by Asiamoney
magazine, an affiliate of Euromoney, as the Best Newly Listed
Company in the Philippines for 2002, and among the top three best managed
small companies in Asia (with market capitalization of below $500M). In
2002, IFC completed with Banco de Oro a Tier II investment of $20 million,
which has a convertible feature. IFC is an observer on Banco de Oro’s
board and is providing the bank with technical assistance to strengthen
key areas of the institution.
IFC has been active in the Philippines for over 25 years, with commitments
of $1.1 billion for its own account and nearly $700 million in loan syndications.
IFC has financed 70 projects in sectors as diverse as energy, infrastructure,
financial markets, agribusiness, health care, manufacturing and tourism.
The mission of IFC 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. From its founding
in 1956 through FY02, IFC has committed more than $34 billion of its own
funds and arranged $21 billion in syndications for 2,825 companies in 140
developing countries. IFC's worldwide committed portfolio as of FY02 was
$15.1 billion for its own account and $6.5 billion held for participants
in loan syndications.