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Washington, D.C., January 21, 2010—
IFC, a member of the World Bank Group, announced today that it plans to invest up to €100 million to buy nonperforming loans in Central and Eastern Europe, working alongside Värde Partners L.P., a specialized distressed debt and asset firm. The proposed co-investment project, which could see up to €450 million invested, aims to help local economies recover from the crisis by addressing the problem of bad debts and troubled assets.
This project to remove troubled assets from bank balance sheets, approved today by IFC’s board, is aimed at ensuring that banks in these emerging markets are able to continue to provide financing to businesses and credit to consumers, boosting economic activity and creating more jobs. The project also will contribute to developing a transparent market for distressed assets, improving market efficiency.
Lars Thunell, IFC Executive Vice President and CEO, said, “Eastern Europe is one of the regions most severely affected by the financial crisis, leading to a dramatic increase in bad bank loans. By investing in these bad loans, we can help banks redeploy their assets back into the economy, giving a boost to economic recovery and job creation."
This co-investment strategy forms part of the Debt and Asset Recovery Program launched by IFC during the 2009 World Bank Group’s Annual Meetings in October. This program supports real and financial sector stability and growth by helping clean up bad assets, allowing businesses and banks to refocus on productive activities.
IFC is the only international financial institution focused exclusively on the private sector, the engine of sustainable development in emerging markets. Along with IBRD, it is currently seeking a capital increase to strengthen its ability to create opportunity for the poor in developing countries—including by addressing the problem of distressed assets.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit
www.ifc.org
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About Värde
Värde is a leading investor in distressed securities and assets, as well as various types of discounted obligations, including nonperforming and underperforming corporate, consumer and real estate loans and high yield debt. Established in 1993, Värde is based in Minneapolis, U.S.A., with offices in London and Singapore. It has a 15-year track record in investing in and resolving distressed assets, as well as experience in originating assets in emerging markets. With over 135 staff, Värde has over $5.0 billion in assets under management. For more information, visit
www.varde.com
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