Brazil: IFC invests US$20mn in Fibra, grants US$30mn credit line

Jun 2007
Washington, United States, June, 21 2007 - IFC announced its first equity investment in the Brazilian banking industry and said it would buy US$20mn in new common shares in Brazilian midsize bank Fibra.

The investment comes to roughly 8% of bank capital, which will rise to 520mn reais (US$272mn) from 480mn reais with the issue of new shares, she said.

IFC also granted Fibra a seven-year, US$30mn credit line in Brazilian reais for domestic middle market lending operations, she said.

IFC has previously carried out equity operations with banks in Mexico and Colombia. The organization is open to additional equity investments in midsize Brazilian banks but has not yet lined up other operations, the spokesperson said.

IFC has participations in local security companies Cibrasec and Rio Bravo and microcredit company Microinvest.

In January this year, Fibra approached IFC to help fund a bond issue in Brazilian reais for US$50mn.

Fibra recorded net profits of 71.4mn reais (US$37.3mn) last year, up 77.3% on 2005. The central bank ranked Fibra as Brazil's 22nd largest bank with 8.34bn reais in total assets at end-2006. Local holding Vicunha controls Fibra.

Local midsize banks Alfa, BiBanco, Daycoval, Indusval and Mercantil do Brasil are signed on as issuing banks in IFC's global trade finance program.


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