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IDB closes the first ever internationally syndicated loan in Paraguay

The Inter-American Development Bank (IDB) closed a $40 million syndicated loan with Banco Continental in Paraguay to help fund lending to small and medium-sized business.

The operation consists of a five-year loan of $25 million (A Loan) from the IDB’s own resources with a two-year grace period; and $15 million syndicated loan (B Loan) involving private investors through the sale of participations divided in two tranches.

The first tranche of $5 million, funded by Dexia Micro-Credit Fund, managed by BlueOrchard, has a three-year bullet repayment. The second tranche of $10 million, with a five-year maturity and two-year grace period, was funded by responsAbility SICAV (Lux) Mikrofinanz-Fonds and responsAbility SICAV (Lux) Microfinance Leaders, managed by responsAbility Social Investments AG. The IDB was the lead arranger in this transaction.

This transaction constitutes a milestone for Banco Continental and the IDB. This is the first ever internationally syndicated Loan in Paraguay, and the first time that the IDB has engaged with responsAbility as lender for an operation. For Banco Continental, it is the first time to access international investors through a syndication.

“This operation will allow the IDB, the B lenders and Banco Continental to broaden and deepen access to much needed financing for small and medium enterprises to support high-impact economic development,” said Daniela Carrera-Marquis, Chief of the Financial Markets division. “This transaction will allow small and medium businesses to finance activities and investments to expand and improve their products.”

"This transaction will contribute to boost international confidence in the Paraguayan financial system and its capacity to contribute to economic development", commented Carlos Moreno, Banco Continental´s General Manager".

The operation is part of the IDB beyondBanking program, which seeks to promote sustainable environmental, social and governance practices among financial intermediaries in the region, through financing, risk mitigation and knowledge sharing.

More and more financial institutions in Latin America and the Caribbean are adopting sustainability values, which makes them more attractive to international investors. The Banco Continental loan is an example on how the IDB is playing that catalytic role among our partner financial institutions committed to sustainability, Carrera said.

"IDB’s Structured and Corporate Finance team actively seeks investments intended to create positive impacts beyond financial returns" commented Gema Perez, Project Team Leader. "We are pleased to see that this strategy is paving the ground for private investors to join us in this goal."

About Banco Continental

Founded in 1980, Banco Continental is one of the main banks in Paraguay. With more than $1 billion in assets, Banco Continental counts on the second largest network in the country with 43 branches, 13 departments and more than 750 employees.

About IDB

The Inter-American Development Bank is the principal source of long-term financing for projects of economic development in Latin America and the Caribbean. Its Structured and Corporate Finance Department is responsible for projects without sovereign guaranties that include loans and partial credit guaranties for clients in both the private and public sectors.

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