LONDON, June 5 -- The International Finance Corporation (IFC) announced that it intends to securitize US$400 million of its portfolio of loans to privately owned companies in 11 developing countries. The transaction, filed with the U.S. Securities and Exchange Commission today, represents the first time a pool of loans made to companies in developing countries will be securitized and sold through a public offering in the global financial markets. Under the terms of the transaction, IFC will pool a group of its senior loans to 73 private companies located in Asia and Latin America and sell participation interests in the loans to an off-shore trust. The trust will finance the acquisition of the loan participations through the sale of certificates in the global market. CS First Boston has advised IFC in this undertaking and will be the lead manager for the transaction. Deutsche Bank AG London and UBS Securities Inc. will act as co-managers. "This pioneering transaction will enable IFC to accomplish two important
developmental goals: to increase our capacity to invest in developing countries by freeing up capital on our balance sheet and to mobilize private sector investment from institutions active in the asset backed market that have not invested previously in developing countries," said Jannik Lindbaek, Executive Vice President of IFC. The offshore trust will issue three tranches of securities. Class A certificates are expected to be granted a rating of "Aa2" by Moody's Investors Service and "AA" by Duff & Phelps Credit Rating Co. Class A certificates amounting to US$340 million will be registered with the U.S. Securities and Exchange Commission and listed on the Luxembourg Stock Exchange. Class B certificates, totalling US$40 million, will be placed separately outside the U.S. IFC will purchase and retain US$20 million of Class C certificates. A registration statement relating to the Class A Certificates has been filed with the U.S. Securities and Exchange Commission but has not yet become effective. The Class A
Certificates may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This communication shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Class A Certificates in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. A copy of the prospectus may be obtained from CS First Boston Corporation, Park Avenue Plaza, 55 East 52nd Street, 39th floor, New York, N.Y. 10055. IFC is a member of the World Bank Group and is the largest multilateral source of equity and loan financing for private sector projects in developing countries.