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| BICBanco SME FDIC |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 28449 |
| Company name | Banco Industrial e Comercial S.A. |
| Country | Brazil |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Pend FAP |
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| Date SPI disclosed | October 9, 2009 |
| Projected board date | November 10, 2009 |
| Date revised SPI disclosed | October 14, 2009 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The project is aligned with Central Bank’s initiatives to facilitate long-term funding solutions to mid-sized banks, it aims to help reverse the recent de-leveraging effect brought on by the international financial crisis. It capitalizes on the size and depth of Brazil’s local capital markets, and complements other efforts of the Brazilian Government. In this context, BicBanco (the “Bank”) wants to continue diversifying its access to stable funding sources through market-based transactions. For this purpose, the Bank will continue to develop securitization structures through funding vehicles, such as FIDCs, the Brazilian-equivalent of a bankruptcy-remote trust in OECD environments. Accordingly, through this Project, IFC would support BicBanco in its efforts to launch FIDCs that would provide local currency funding to Small and Medium Enterprises (“SMEs”). |
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| Project sponsor and major shareholders of project company |
BicBanco is a leading Brazilian mid-sized bank, which has operated predominantly in the middle market niche since 1938. It is publicly traded at BM&FBovespa, and has a nation-wide presence with 39 branches in all regions of Brazil.
BicBanco is held by the Bezerra de Menezes family, who currently holds approximately 70% of total shares of BicBanco. Over 28% of the total shares represent the Bank’s free float. |
| Total project cost and amount and nature of IFC's investment |
The proposed IFC investment involves the purchase (or the guarantee provided) of Senior Quotas up to 25% (but in any case no more than BRL 100 million) of the total FIDC issuance amount. |
| Location of project and description of site |
The FIDC will be registered and launched in the local Brazilian capital market and will be used to finance SMEs loans of companies domiciled in Brazil.
BIC is headquartered in Sao Paulo and operates 39 branches in Brazil and one branch located in Cayman. While the Bank has national coverage, which includes 28 cities. BicBanco’s operations are largely located in the Southern and Southeastern regions of Brazil, where most middle-market companies are based. |
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| Anticipated development impact of the project |
Increased access to finance by SMEs: Ensure funding availability to local SMEs by providing access to long-term funding to BicBanco.
Strengthen the sustainability of a leading Brazilian mid-sized bank. Funding diversification will strengthen the Bank’s funding stability and its business sustainability. |
| IFC's expected development contribution |
| The Project will support the growth and expansion of BicBancos’s operation in the SME segment, which has high social and developmental impact, by offering long-term local currency funding, which currently difficult to access in the Brazilian market. IFC’s anchor investor (or guarantee provider) role should help mobilize resources and incentivize local investors to invest in long-tenor financing instruments, such as this FIDC. This term financing structure will contribute to strengthening BicBanco’s asset liability structure. |
| Environmental and social issues - Category FI |
| This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. Under an existing project, the client has developed a satisfactory Social & Environmental Management System (SEMS) to screen operations according to the IFC Exclusion List and check for compliance with the national laws and regulations. The project will be required to: maintain the SEMS to ensure that its investments/activities are in compliance with the IFC Exclusion List and national laws and regulations; and submit a periodic report to IFC as per a format to be provided by IFC. |
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| For inquiries about the project, contact: |
Marcos Kairuz
Superintendente
Av. Paulista, 1048 15th floor
01310-100
São Paulo – SP
Brazil |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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