The Inter-American Development Bank (IDB) has closed a $140 million syndicated loan to help Banco Sofisa increase its capacity to lend to small enterprises in Brazil.
The transaction involves a five-year IDB $25 million A loan and a syndicated B loan composed of four tranches: two denominated in U.S. dollars for a total amount of $90 million, and two denominated in Euros for a total amount of € 18.6 million. The syndicated loans mature in two and three years.
The IDB and Banco Itaú Europa acted as global coordinators and joint bookrunners responsible for the syndication process, while Banco do Brasil Vienna AG, HSBC Bank USA N.A. and Standard Bank PLC. acted as joint bookrunners in the transaction.
“The operation will promote greater participation of the private sector in financing to SMEs, especially those located in the north and northeast states of Brazil, which is crucial to enhance competitiveness, job creation and sustained economic growth in the country” said Daniela Carrera-Marquis, Chief of the Financial Markets Division at the IDB. In Brazil, there are about 4.5 million small businesses that create more than 60 percent of urban jobs and generate more than 30 percent of gross domestic product, but their capacity to grow is limited by insufficient credit. Financial institutions play an important role in the expansion of SMEs, facilitating access to financial products.
With the resources, Sofisa will increase lending to small firms with incomes not exceeding $30 million per year particularly in the least developed states in the north and northeast of Brazil: Pará, Ceará, Pernambuco, Bahia, Goiás and Amazonas.
“We are pleased to have worked together with the IDB,” said Gilberto Meiches, President of Banco Sofisa. “Banco Sofisa´s commitment to promote SME credit growth in underserved regions in Brazil is very much aligned with IDB´s Financial Markets Division’s strategy to promote sustainability principles in banking. The synergies are large and we have consolidated a strategic relationship with the IDB”.
Other participants in the syndication were: ING Bank NY as Mandated Lead Arranger; Barclays Bank PLC, Commerzbank Aktiengesellschaft, Israel Discount Bank of New York and Santander Bank PLC as Lead Arrangers; and AKA Ausfuhrkredit-Gesellschaft mbH, BAC Florida Bank, Banco Security, Oberbank AG, Standard Chartered Bank and UBS AG Stamford Branch as Arrangers. The successful mobilization of 15 B-Loan participants in this transaction was the result of a well executed syndication strategy and the commitment of IDB’s partners in the B-Loan Program.
“The confidence deposited on us by IDB has been instrumental in the successful syndication of this loan,” Ricardo Pereira, Banco Sofisa’s CFO and Investment Relations Director said. “We have sent a positive signal to international investors and expanded our network of banks. The transaction was almost two times oversubscribed”.
Sofisa serves the Brazilian SME market by providing banking services to over 1,000 clients through 14 branches in 11 states. Thanks to the support of the IDB, Sofisa is expected to duplicate its customer base by 2015, while total loans will increase from the current $1 billion to more than $2 billion.
About Banco Sofisa
Banco Sofisa is a leading provider of credit to SMEs. Sofisa has a solid record of more than 20 years with a strong presence in this segment. Founded in 1961, Sofisa is listed on the São Paulo Stock Exchange, BOVESPA, since May 2007. By September 2010, Sofisa had $458 million in equity and $2.8 billion in assets.
About the IDB
The IDB is the leading source of multilateral financing for sustainable economic, social and institutional development in Latin America and the Caribbean. Its A/B loans, typically used to finance private sector operations, offer B Loan investors the advantage of being covered by the IDB’s preferred creditor status.