Parallel Loans

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In response to international commercial banks' retrenchment from cross-border emerging market lending in fiscal year 2009, IFC began syndicating parallel loans to International Financial Institutions, and other ineligible B loan participants.

Under this approach, IFC acts as arranger—and can also act as administrative agent—by using its existing syndication platform, deal-structuring expertise, and global presence to identify investments, perform due diligence, and negotiate loan documents in cooperation with parallel lenders.

Lenders under this structure enjoy cost and time savings through this streamlined approach. Borrowers benefit from enhanced access to financing and time & cost savings throughout the life of the loan.


Master Cooperation Agreement

Cooperation among International Financial Institutions increased significantly following the global financial crisis in 2008 and the resulting lack of commercial banks' liquidity.  In October 2009, IFC signed a Master Cooperation Agreement (MCA) with the three largest European Development Finance Institutions: DEG, FMO and Proparco. The agreement details the manner in which DFIs work together to co-finance projects when IFC is the mandated lead arranger. The MCA also provides documentation templates which significantly reduces costs and increases efficiency.

Nearly six years later, financing from IFIs continues to play a very important role in IFC's Syndicated Lending Program as the introduction of Basel III has significantly reduced the availability of long-term funding as well as commercial banks’ appetite for risk. There are now 26 MCA signatories (see chart below). MCA signatories have provided over $3 billion in parallel loans for clients since the establishment of MCA in 2009.

 

 
MCA Signatories
Date of Signing
FY
1
International Finance Corporation
10/5/2009
FY2010
2
France's Société de Promotion et de Participation pour la Coopération Economique (Proparco)
10/5/2009
FY2010
3
Germany's Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG)
10/5/2009
FY2010
4
Netherlands' Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden N.V (FMO)
10/6/2009
FY2010
5
Development Bank of Japan (DBJ)
1/3/2010
FY2010
6
Austria's The OPEC Fund for International Development (OFID)
6/11/2010
FY2010
7
Belgium's Societe Belge d'Investissement pour les Pays en Developpement SA/Investment Co. for Dev. Countries (BIO)
8/17/2010
FY2011
8
Black Sea Trade and Development Bank (BSTDB)
10/10/2010
FY2011
9
Oesterreichische Entwicklungsbank (OeEB) or Development Bank of Austria
12/6/2010
FY2011
10
Eurasian Development Bank
3/14/2011
FY2011
11
Arab Petroleum Investments Corp (APICORP)
3/28/2011
FY2011
12
United States' Overseas Private Investment Corporation (OPIC)
5/31/2011
FY2011
13
Islamic Corporation for the Development of the Private Sector (ICD)
8/15/2011
FY2012
14
Export Development Canada (EDC)
2/8/2012
FY2012
15
United Kingdom's Commonwealth Development Corporation (CDC)
3/13/2012
FY2012
16
Portugal's Sociedade para o Financiamento do Desenvolvimento (SOFID)
3/29/2012
FY2012
17
Banque Ouest-Africaine de Developpement "West African Development Bank" (BOAD)
8/14/2012
FY2013
18
Swedfund
8/30/2012
FY2013
19
Compañía Española de Financiación del Desarrollo (COFIDES)
10/13/2013
FY2014
20
International Investment Bank (IIB)
1/31/2014
FY2014
21
Hungarian Export-Import Bank (HEIB)
6/10/2014
FY2014
22
Swiss Investment Fund for Emerging Markets (SIFEM)
10/10/2014
FY2015
23
Finnish Fund for Industrial Cooperation Ltd (Finnfund)
10/10/2014
FY2015
24
Instituto de Credito Oficial (ICO)
10/10/2014
FY2015
25
Japan International Cooperation Agency (JICA)
4/18/2015
FY2015
26
Cassa Depositi e Prestiti (CDP)
4/20/2015
FY2015
27
PTC India Financial Services Ltd (PFS)
4/28/2015
FY2015
28
Indian Renewable Energy Development Agency (IREDA)
4/29/2015
FY2015
29
Eastern and Southern African Trade and Development Bank (PTA Bank)
8/11/2015
FY2016
30
Africa Finance Corporation
10/13/2017
FY2018