The board of directors of the Overseas Private Investment Corporation (Opic) have approved US$250mn in financing for a global framework agreement which will enable Wachovia Bank to expand its lending to banks in emerging markets. The framework, which supplements an existing agreement between Opic and Wachovia, will devote up to 60% of its lending – US$150mn – to banks in Turkey.
Opic’s financing will augment a US$100mn framework agreement by which Opic and Wachovia share risk on loans administered by the North Carolina-based bank, America’s fourth-largest in terms of assets. Since the existing framework agreement was executed in February 2004, Opic has approved five Wachovia transactions with an outstanding exposure of approximately US$78mn, including two transactions with Turkish banks totaling US$45mn.
“Opic’s existing framework with Wachovia has been extremely successful, enabling the bank to expand its lending to customers in emerging markets worldwide, and we anticipate further success with this expansion,” says Opic president and CEO Peter Watson. “Turkey in particular represents an important market for Wachovia, and should derive important economic and developmental benefits from this facility.”
“Wachovia’s correspondent banks represent an effective conduit for channeling capital to borrowers in emerging markets, in turn increasing the availability of funds for other sectors of their economies. By supporting this framework, Opic is diversifying its on-lending in eligible countries, while at the same time assisting an American bank in its efforts to increase its business overseas,” Watson adds.