WASHINGTON, D.C., January 25, 1999 ---The
International Finance Corporation today signed an agreement to provide
loans of up to US$50 million with a maturity of 10 years to Banco de Galicia,
the largest and one of the strongest private banks in Argentina.
The first tranche of the loan, for $30 million, will be disbursed immediately.
The second tranche, for $20 million, is expected to be disbursed
in conjunction with a proposed IFC syndicated credit facility to Banco
de Galicia of up to US$200 million.
The investment would provide longer-term financing to medium-sized Argentine
companies which are constrained by the tight credit market that has developed
from the turmoil in international financial markets and consequent lack
of access to capital for companies across Latin America.
The loan to one of the few remaining locally owned banks in Argentina demonstrates
support for the Argentine financial system, said Karl Voltaire, IFC's Director
for Latin America and the Caribbean. It provides medium-sized Argentine
companies with the financing needed for working capital and business expansion
Galicia is the largest private bank in Argentina in terms of assets, liabilities,
and branches with a strong and growing influence outside of Buenos Aires,
particularly in lending to middle market companies. Galicia provides a
full range of financial services to individuals and corporate customers
in commercial and investment banking. As of June 30, 1998, Galicia, primarily
owned by the Escasany, Ayerza, and Braun families, had total assets of
IFC's exposure in Argentina is the second largest in terms of net held
and disbursed portfolio. As of June 30, 1998, IFC's net held and
disbursed portfolio in Argentina amounted to $996.2 million and $850.5
million respectively, accounting for 9.2 percent and 10.5 percent of the
total IFC net portfolio.
IFC, part of the World Bank Group, fosters economic growth in the developing
world and emerging market economies by financing private sector investments,
mobilizing capital in the international financial markets, and providing
technical assistance and advice to governments and businesses.