IIC Approves A Partial Credit Guarantee Program With A Nacional Financiera, S.N.C


WASHINGTON, D.C. -- On March 30, 2005, the Inter-American Investment Corporation (IIC) approved a US$60 million local currency equivalent partial loan guarantee program with Nacional Financiera, S.N.C. (NAFIN), Mexico's largest development bank.

The main goal of the guarantee program is to support non-bank financial intermediaries and medium-size companies seeking to broaden and diversify their sources of funding. This will be achieved by issuing debt securities. Partial credit guarantees will enhance the issue ratings and promote their purchase by pension funds and mutual funds, thus channeling savings to long-term private investment.

The program targets non-bank financial intermediaries and companies entering the securities market for the first time with medium- and long-term issues. With this operation, the IIC seeks to increase the supply of credit. This joint IIC/NAFIN effort will increase the overall amount of available resources and diversify portfolio risk while enabling each institution to benefit from the other's specific expertise. The program is expected to benefit some eighty small and medium-size Mexican companies.

The Inter-American Investment Corporation is a multilateral financial institution that is part of the Inter-American Development Bank 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 borrowing member countries by stimulating 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, visit its Web site at www.iic.int.

Contact: Carlos Roa/Emilio Lozoya

Telephone: (202) 623-3955

Email: carlosroa@iadb.org