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 plans.
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 $13 billion.
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.
