The loan is the second part of an agreement whereby the IFC lent US$40mn to BBA from its own funds in August, and a group of banks was expected to lend another US$50mn. However, demand among international creditors exceeded the initial arrangement by US$10mn.
The loan is for a year and the annual interest rate was set at 2.37% over Libor. It comes at a time when credit for Brazilian companies is still tight because of uncertainties over President Luis Inacio Lula da Silva’s government and the economy.
Not only is the loan under the IFC umbrella, but it also benefits from a good track record for one-year export financing in Brazil.
The funds will be disbursed in mid-January by international banks Hypovereinsbank, Rabobank, Standard Chartered, Bayerische LB, ABN-Amro, United Financial of Japan, Wachovia, Scotiabank and Bank of Montreal.
In November 2002 Brazil’s second largest private bank Itau announced the acquisition of BBA. The deal still awaits approval by Brazil’s antitrust authorities.