IIC and Banco Itaú S.A. Signed The First Operation Of Its Kind In Brazil For Providing Low-Cost, Local-Currency Residential Mortgages
09/17/2007Banco Itaú S.A. will place the IIC loan proceeds of up to 200 million reais to benefit 2,000 households
São Paulo, Brazil- On September 14, 2007, the Inter-American Investment Corporation (IIC) and Banco Itaú S.A. signed a loan agreement involving an innovative program to source local-currency funding offshore and bring it into Brazil to provide affordable medium- and long-term residential mortgages of up to R$100,000 per household.
The IIC’s fixed-rate reais-linked loan consists of an A Loan of up to the U.S. dollar equivalent of R$30 million (approximately US$15 million) and a B Loan of up to the U.S. dollar equivalent of R$170 million (approximately US$85 million). With this A/B structure, the IIC will mobilize almost six times the funding it provides directly.
According to Steven Reed, Deputy General Manager of the IIC, "This unique transaction is aligned with the expected increase of mortgage financing in Brazil, and it represents an attractive funding alternative for Banco Itaú S.A. to book loans to a great number of residential mortgage borrowers. Because it is the IIC’s first local-currency loan in Brazil, the operation will also be highly visible and provide a significant demonstration effect to encourage further lending of this kind."
A signing ceremony took place at the offices of Banco Itaú S.A. in São Paulo. Present at the ceremony for Banco Itaú S.A. were Paulo Roberto Soares, Senior Managing Director from the International Area, and Mr. Luiz Antonio Nogueira de França, Managing Director of the Mortgage Area. Mr. Steven Reed, Deputy General Manager of the IIC, represented the IIC.
The Inter-American Investment Corporation is a multilateral financial institution that is a member of the Inter-American Development Bank (IDB) Group. It provides financing (in the form of equity investments, loans, guarantees, and other instruments) and advisory services to private enterprises in Latin America and the Caribbean. The IIC's mission is to promote the economic development of its regional member countries by encouraging the establishment, expansion, and modernization of private enterprises, particularly those that are small and medium in size. For more information on the IIC's activities, please visit www.iic.int.
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