Washington, DC/ Bogota, June 21, 2006–The
International Finance Corporation, the private sector arm of the World
Bank Group, will provide a partial credit guarantee of up to 69 billion
Colombian pesos to Interbolsa on its inaugural bond issue of COP 230 billion.
The proceeds of the bond issue will help the company reduce its reliance
on commercial bank funding, which is needed on a daily basis to settle
its trading positions. It will also free up a significant portion
of Interbolsa’s equity that is currently used for settlement purposes
and redeploy it for underwriting other products and services, notably private
corporate bonds.
In addition, IFC will sign an agreement to purchase equity shares in Interbolsa
for a total investment of $10 million, representing a shareholding of up
to 8 percent. The equity investment will also give IFC the right to have
a seat on the company’s board of directors.
This operation is part of a broader IFC and World Bank program to help
broaden and deepen Colombia’s domestic securities markets, enabling them
to make a greater contribution to the country’s growing needs for housing,
infrastructure, and general private sector development.
Atul Mehta, IFC’s Director for Latin America and the Caribbean,, said,
“For IFC, the transaction with Interbolsa is in line with our strategy
of broadening the financial markets in Colombia, revitalizing the private
sector, and improving access to finance through development of capital
markets. The issuance of the bond by Interbolsa will greatly improve market
liquidity and activity in the domestic government securities markets, which
is critical in enabling a nongovernment bond market to emerge, and necessary
for financing housing, infrastructure, and private-corporate operations.”
Today, the Colombian government bond market faces several constraints,
including limited funding that comes primarily from short-term bank debt,
and a settlement process that requires independent dealers and other market
participants to maintain significant liquidity to settle their daily trading
positions. Interbolsa will be the first securities dealer in Colombia
to issue a bond under new regulations put in place by Superintendencia
Financiera, the country regulatory agency. The proceeds of this bond will
help ensure that Interbolsa can meet its settlement obligations without
having to liquidate its investment holdings in government bonds, thereby
minimizing market disruptions and providing overall price stability in
the market. Interbolsa will also be well positioned to capitalize on its
regional network and strength as nearby countries see growth in their securities
markets.
“We are delighted that our relationship with IFC has helped us be the
first securities dealer in Colombia to issue a bond under the new guidelines
established by Superfinanciera,” added Rodrigo Jaramillo, CEO of Interbolsa.
“We are starting on a long road toward growth, both domestically and in
the region, and with IFC by our side, as guarantors of the bond and more
importantly as shareholders, we are confident that we can achieve our objectives
and remain a dominant market player for years to come.”
IFC in Colombia
IFC’s total portfolio in Colombia was $280 million as of June 2005. Since
1956, when Colombia joined IFC, the Corporation has provided $1.4 billion,
including syndications, for 58 companies in the country.
The financial sector is one of IFC’s priorities in Colombia, with special
emphasis on supporting housing finance and microfinance, as well as strengthening
local capital markets and improving corporate governance. IFC’s strategy
includes also increasing support to sectors that are strategic for economic
growth in the context of free trade agreements, such as infrastructure
projects, port expansions, road and airport concessions, and support to
companies in the logistics services sector.
About Interbolsa
Interbolsa was established in 1990 in Medellin, as a member of the stock
exchange. It was incorporated 10 years ago as Comisionista de Bolsa, Colombia’s
first independent brokerage company, specializing in fixed income and equities
trading. By 2000, the company rose to the top rank of market traders
and received authorization from regulatory authorities to be the country’s
first independent participant (not affiliated with a bank) in the “market
maker” program. Since then, the company has become a strong regional
player, expanded its product offering, and, through significant investment
in information technology, has become one of the leading full service brokerage
companies in Colombia today, with wide national coverage. Interbolsa
is currently the second market maker in government bonds, after Bancolombia
S.A, with a market share of approximately 30 percent as of end-2005. It
has a short term counterparty risk rating of AA with a positive outlook
from BCR, a local ratings agency.
About IFC
The International Finance Corporation is the private sector arm of the
World Bank Group and is headquartered in Washington, D.C. IFC coordinates
its activities with the other institutions of the World Bank Group but
is legally and financially independent. Its 178 member countries
provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment
in developing and transition 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 FY05, IFC has committed more than $49 billion of its own
funds and arranged $24 billion in syndications for 3,319 companies in 140
developing countries. IFC’s worldwide committed portfolio as of FY05 was
$19.3 billion for its own account and $5.3 billion held for participants
in loan syndications. For more information, visit www.ifc.org.
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