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National City has received approval from the Overseas Private Investment Corp (Opic) securing a US$350mn lending facility to expand international business in signatory countries of the Central America-Dominican Republic-United States Free Trade Agreement (Cafta-DR).

The facility will be used to finance home lending programmes through correspondent banks with US$100mn set aside for housing construction loans for low and middle-income housing.

The lending agreement allows National City to increase its international business in key developing countries while mitigating risk through Opic. The US federal agency offers domestic companies overseas political risk insurance and financing.

National City is only one of a few domestic banks, and primarily the only Midwestern regional bank, that partners with Opic in offering emerging economies access to lending and financing services. This lending agreement is National City’s third such engagement with Opic, who began working with National City in 2003.

“The strong private/public relationship National City has established with Opic has allowed us to leverage our highly successful domestic banking capabilities to grow internationally and partner with financial institutions in developing countries,” explains George Fowler, senior vice-president of international markets and financial institutions at National City. “We have always believed that the proper way to administer these programmes is in conjunction with our good correspondent banking partners – banks with a presence in the country and expertise in the local ways of doing business. It is especially rewarding to work with Opic and these local banks to bring new financial services to developing and emerging markets.”

Of the lending facility’s US$350mn, US$100mn will be earmarked for housing construction loans for low and middle-income housing in Cafta member countries. At least 60% of the agreement’s loans will be allocated to small and medium-sized residential mortgages. In addition to working with correspondent banks in Latin America, National City will also focus on providing housing financing to Opic-member banks in Central and Eastern Europe.

“This new framework with National City will enable Opic to mobilise capital for a distribution system able to finance the expansion of existing businesses and the creation of new ones, which will in turn generate thousands of jobs in emerging markets,” says Opic president and CEO Robert Mosbacher. “Its emphasis on housing construction and Cafta countries, in particular, will result in the provision of much-needed credit for a sector vital to the region’s economic growth.”

National City International Banking division works to help foreign and domestic companies leverage the bank’s extensive experience in export finance to grow their businesses worldwide.

International Banking offers a full line of cross-border financing and credit, including structured trade finance, letters of credit, multicurrency loans, alternative financing and a host of web-based products and services to meet the demands of global enterprise.  Clients with business in Canada receive special attention through National City Canada.  National City also offers millions of dollars in loans to assist US companies establish foreign subsidiaries through Opic, along with a comprehensive set of international payment and collection services.