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São Paulo and Washington, D.C., July 17, 2013 -
IFC, a member of the World Bank Group, announced an investment of $275 million to Banco Daycoval S.A, which will expand access to finance for small and medium enterprises (SMEs) in Brazil.
The financing involves an IFC five-year $50 million equivalent local currency-indexed (A loan) and a syndicated loan composed of three tranches: two denominated in US dollars for $184,5 million, and one denominated in Euros in the amount of €30,5 million (B loan). The syndicated loans mature in two and three years.
This is IFC’s largest syndicated loan to a bank specialized in corporate credit in Brazil. Twelve banks participated in the syndicated loan: Itaú BBA International, Standard Chartered, Banco do Brasil AG, Wells Fargo, Banco Bradesco Europa, Commerzbank, ING, Santander, Goldman Sachs, Oberbank, Aka Bank and Israel Discount Bank. It is also the fourth IFC loan to Daycoval, a client since 2006 and an IFC investee company since April 2013, when IFC became a shareholder through the conversion of the warrants it held since March 2009.
The IFC loan will be used exclusively to provide loans to companies located in the less developed parts of Brazil, specially the Northeast and North regions, while the resources from the syndicated loan can be used to finance SME’s countrywide.
In the North and Northeast regions, Daycoval works with branches in Amazonas, Alagoas, Bahia, Ceará, Pará, Paraíba, Pernambuco, Rio Grande do Norte and Sergipe. According to Ricardo Gelbaum, Daycoval’s Investor Relations officer, IFC’s loan will contribute to increase Daycoval’s operations in those regions. “Data from Central Bank of Brazil shows that the GDP in the Northeast region, for example, grew 2% during the first quarter of 2013, while the average of the country grew only 1.05%. This happened due to the growth of income and employment as well as of new business in that region. Daycoval is aware of these great opportunities and focused on the partnership with small and medium enterprises in those regions”.
“Banco Daycoval has been a key partner to IFC for achieving our strategic goal of increasing access to finance for SMEs, in Brazil” said Giri Jadeja, IFC Senior Manager for Financial Markets. “We look forward to continuing this long-term partnership with Banco Daycoval to support its expansion reaching out SMEs, important contributors to job creation and economic growth.”
SMEs account for about 90 percent of businesses and more than 50 percent of employment worldwide. They play a major role in creating jobs and generating income for low income people; they foster economic growth, social stability, and contribute to the development of a dynamic private sector. As such, access to financial services is vital in developing a vibrant SME sector in any economy. In Brazil, IFC has made available for its own account since 2004 around $4.6 billion equivalent to mid-sized banks in the form of equity, long-term debt, and trade finance guarantees to encourage investment in SMEs.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit
www.ifc.org
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About Daycoval
Banco Daycoval is specialized in corporate credit. In the end of first quarter, had more than 180 points of distribution: 36 branches, 49 retail stores, 59 exchange bureaus/correspondents and 37 Daypag offices. Daycoval is Investment Grade by Moody’s and Fitch Ratings and announces Net Income of R$ 65.7 million in the first quarter of 2013. More information
www.daycoval.com.br/ri
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