Bucharest /Washington DC, December 5, 2003.-
The International Finance Corporation (IFC), the private sector arm of the World, will provide a $5 million 10-year credit line to Domenia Credit, a specialized housing finance company dedicated to originate and service primary mortgages to Romanian households.
IFC is investing together with Deutsche Investitions- und Entwicklungsgesellschaft (DEG), European Bank for Reconstruction and Development (EBRD) and Romanian American Enterprise Fund (RAEF). The total financing package amounts to $29 million equivalent of both debt and equity.
The funding will be used to finance mortgage loans for acquiring, constructing, developing or upgrading residential properties in Romania. It will allow Domenia to build a portfolio of standardized loans and lay the grounds for the secondary mortgage market to secure the access to reliable sources of future funding.
Ana Maria Mihaescu, IFC Chief of Mission in Romania, said, "This investment represents IFC's entry into the Romanian housing finance market, an increasingly important and growing aspect of the Romanian financial sector. Housing finance is a critical pillar of the IFC's strategy to strengthen finance institutions in Romania. By supporting Domenia, IFC will increase the availability and affordability of mortgage finance to Romanian families."
Horia Manda, Chairman of the Board of Directors of Domenia Credit, noted: “The financing agreements signed today by Domenia Credit with DEG, EBRD, IFC and RAEF stand, above all, for a vote of confidence granted to our company, as a recognition of our competence to become both an important player on the Romanian mortgage market and a standard setter thereof. We are delighted that the aforementioned prestigious institutions decided to join their efforts with ours as shareholders and lenders in a complex financing structure, after one year of successful negotiations.”
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY02 was $16.7 billion for its own account and $6.6 billion held for participants in loan syndications.
DEG– Deutsche Investitions- und Entwicklungsgesellschaft, member of KfW Group, is one of the largest European institutions for long-term project and company financing. For 40 years, DEG has been financing and structuring the investments of private companies in developing and transition countries. DEG invests in profitable projects that contribute to sustainable development in all sectors of the economy, from agriculture to infrastructure and manufacturing to services.
The EBRD, owned by 60 governments and two intergovernmental institutions, aims to foster the transition from centrally planned to market economies in central and Eastern Europe and the Commonwealth of Independent States.
The Romanian-American Enterprise Fund (RAEF), a private U.S. corporation, established in 1995 by the U.S. Congress, is a leading institution in private equity and investment banking/advisory services in Romania. Since inception, RAEF and its management company Romanian Capital Advisors (RCA) have led and participated in equity and quasi-equity transactions amounting to over $130 million, and have helped generate an additional $200 million in trade by acting as advisors to other investors. RAEF/RCA are currently playing a senior role as advisors in major privatization transactions in the Romanian energy sector.
