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.