Sao Paulo, Brazil, January 25, 2006
– The International Finance Corporation, the private sector arm of the World Bank Group, has completed its first trade transaction for a Brazilian exporter under its Global Trade Finance Program, with HSBC Bank Brasil originating the deal.
The Brazilian exporter, HSBC’s client, shipped buses to Nigeria under an import letter of credit totaling $9.825 million issued by a local Nigerian bank.
“HSBC was founded 140 years ago to facilitate trade between growing economies, and Trade has remained a core part of its business ever since. It is therefore apt that HSBC should be the first bank in Brazil to close a deal with IFC’s GTFP,” said John Nicholls, Head of Trade and International for HSBC in Brazil.
HSBC confirmed the three-year deferred payment credit with the support of IFC, which issued its payment guarantee, thus providing risk mitigation on both the country and commercial risks associated with the issuing bank.
Eric Striegler, Head of Structured and Corporate Banking Trade Finance, who runs HSBC Bank Brasil’s team of trade structuring specialists, said, “HSBC will use the Global Trade Finance Program to enhance its already strong position as a leading edge innovator of trade finance solutions in Brazil. HSBC and IFC are extremely keen to explore opportunities to work with other Brazilian exporters to Africa, Middle East, Asia and other parts of Latin America.”
The Global Trade Finance Program supports trade by offering payment guarantees of up to three years on the risks taken with bank counterparts in emerging markets worldwide.
”This HSBC trade involved shipments of buses, but there are also significant volumes of other goods from Brazil that are being sold to the African continent – and not just to Nigeria,” said Antonio Neto, an IFC trade specialist. “The growth prospects for the Global Trade Finance Program are strong in Latin America as the program broadens the bank network of risk mitigation that it can provide globally.”
Saran G. Kebet-Koulibaly, IFC’s country manager for Brazil, also noted that IFC’s partnership with HSBC fits with the Corporation strategy in Brazil to support competitiveness of export-oriented companies, a powerful engine for sustainable growth and job generation in the country.
The Global Trade Finance Program began operations on September 30, 2005. In its first three months it booked 70 transactions with an average tenor of five months and a total volume of $63 million. Transaction sizes have varied from $10,000 to $10 million. About 75 percent of the deals supported the small and medium enterprise sector, which is a vital source of job creation and a strategic focus for IFC.
The program has 15 issuing bank members so far, as well as 42 international confirming banks. The issuing banks are in Argentina, Bangladesh, Bolivia, Kenya, Lebanon, Malta, Mauritania, Nigeria, and Pakistan. “There are additional banks ready to join in Argentina, Brazil, the Dominican Republic, Paraguay, and Uruguay. Other target countries in Latin America include Colombia, Ecuador, Guatemala, Jamaica, Peru, and Venezuela,” Neto added.
IFC in Brazil
During fiscal year 2005, Brazil received the largest amount of IFC financing, in dollar value, among Latin American countries. IFC invested $591million, including $190 million in syndications, in sectors ranging from agribusiness and transportation to manufacturing and the financial sector. IFC’s total portfolio in Brazil was $913 million at June 2005.
IFC's strategy for Brazil focuses on enhancing clients' prospects for competitiveness and growth, improving the country's social equity through voluntary actions by the private sector, and continuing to promote sustainability. Since 1956, when Brazil joined IFC, the Corporation has provided $7.45 billion, including syndications, for 162 companies.
About IFC
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment in developing and transition 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 FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit
www.ifc.org/gtfp
.
About HSBC
With more than 1,600 branches covering all Brazilian states, HSBC Bank Brasil is a wholly owned subsidiary of HSBC Group, one of the largest banking and financial services organizations in the world, with well-established businesses in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. Headquartered in London, HSBC Group has total assets of $1,467 billion (at 30 June 2005), more than 260,000 employees and more than 9,700 offices and branches in 77 countries and territories.
