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IDB makes US$25 million loan to Global Bank of Panama

The Inter-American Development Bank will provide Panama’s Global Bank a US$25 million long-term loan to support the expansion of its mortgage origination portfolio and lending to small and mid-size enterprises (SMEs), the IDB announced today.

“This loan is an important recognition for Global Bank and will enhance our capacity for growth in the residential mortgage and SME sectors,” said Global Bank Executive Vice President Otto Wolfschoon.

The transaction will help Global Bank diversify its funding sources, support its liquidity position and improve its asset liability maturity match at a time of volatility in international financial flows. The potential participation of foreign commercial banks as B lenders would provide additional financing for Global Bank, further diversifying its sources of funding.

“Our loan will provide Global Bank long-term funding to support the growth of two key sectors: mortgage financing for low- and middle-income homebuyers – one of Global’s fastest growing business areas – and lending to SMEs, which play a significant role of job creation in Panama,” said Financial Markets Division Chief Daniela Carrera-Marquis of the IDB’s Structured and Corporate Finance Department.

Global Bank, Panama’s second largest locally-owned bank, is active in the corporate and retail segments. As of September 2008 it had assets totaling US$1.8 billion and US$1.3 billion in deposits.

The IDB is the leading source of long-term financing for economic and social development in Latin America and the Caribbean. Its Structured and Corporate Finance Department is responsible for non-sovereign guaranteed operations, which include loans and partial credit guarantees for private sector companies and state-owned enterprises.

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