WASHINGTON, D.C., August 2 -- The International
Finance Corporation (IFC) announced today a $18 million currency hedging
facility for Turbana Corporation, the US marketing arm of a Colombian banana
The ten-year hedging facility was designed in conjunction with Emcor Risk
Management Consulting, an Irvington, New York-based financial consulting
firm. The facility will allow Turbana to hedge its foreign currency transportation
costs (primarily Belgian francs) through the use of derivative products
such as currency swaps, currency forwards and currency collars. IFC will
execute these transactions directly with Turbana and will hedge itself
by entering into mirror transactions with eligible market counterparties.
Earlier this month, Turbana Corporation initiated this hedging facility
with a series of Belgian franc/U.S. dollar currency forwards and the purchase
of two currency collars.
"Access to sophisticated financial hedging instruments is vital to
the international competitiveness of companies in the developing world,"
said Richard Frank, IFC Vice President, Finance and Planning. "IFC
has an important role to play in helping enterprises in the developing
world become fully aware of the range of risk management techniques and
overcome country risk barriers that often deny access."
IFC began to intermediate currency and interest rate swaps for clients
in developing countries in 1990. It offers firms in the developing countries
risk management services including advice on developing hedging strategies
and instruments, intermediating the purchase of hedging instruments, mobilizing
the participation of international banks in such transactions on a risk/sharing
basis, promoting the development of local capital markets by bringing these
techniques to local financial institutions, and transferring technical
IFC, a member of the World Bank Group, promotes private investment in developing
countries. It does this by financing private sector projects, without government
guarantees, by mobilizing funds in the international capital markets for
developing country businesses, and by advising businesses and governments
on investment-related matters. Since IFC was founded in 1956 it has provided
over $11 billion in financing for nearly 1,000 companies in 100 developing