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FIRST SECURITIZATION OF BRAZILIAN MEDICAL EQUIPMENT LEASES


Brigid Janssen
Phone: (202) 458-4698
Fax: (202) 974-4384
E-mail: bjanssen@ifc.org


WASHINGTON, D.C., September 12, 2000 --- The International Finance Corporation, which holds equity in Medical Systems Finance Holding (MSFH), has advised the company in the structuring of the first securitization of medical equipment leases in Brazil.
The US$80 million transaction, using a special purpose vehicle, MSF Funding LLC, is backed by cash flows from an existing pool of dollar-denominated equipment leases and loans signed by Brazilian hospitals and clinics. IFC acted as structuring advisor to MSFH in this transaction, which is the first securitization of existing onshore Brazilian contracts to be rated above the sovereign ceiling.
The securitization will finance MSFH's sales of scanners, ultrasound devices and other medical equipment to Brazil. MSFH serves Latin American markets, including Brazil, Argentina, Colombia, Mexico and Venezuela. IFC is a founding shareholder of MSFH and currently owns 9.95% of the company's equity. The majority shareholder is DVI International Inc., a wholly owned subsidiary of DVI, Inc., a U.S. medical equipment financing firm. Other partners in MSFH are Philadelphia International Equities Inc. (First Union Group) and FMO, the Netherlands development financing agency.
The deal is the first capital markets transaction carrying an insurance policy from the Multilateral Investment Guarantee Agency (MIGA), also part of the World Bank Group. The insurance protects against transfer and convertibility restrictions and expropriation of funds.
The notes were rated by Moody's Investors Service, Standard and Poor's and Fitch. The class A notes received an A2 rating from Moody's and an A rating from Standard and Poor's and Fitch. The class B notes were rated Baa2 by Moody's and BBB by Standard and Poor's and Fitch. The class C notes received a Ba3 rating from Moody's and a BB rating from Standard and Poor's and Fitch. The three categories of notes, totaling $64 million, were sold to private institutional investors.
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 makes loans and equity investments, mobilizes capital in the international financial markets and provides technical assistance and advice to governments and businesses in the developing world.