RISK MITIGATION: What are Updates & Proposals on Risk Mitigation Products?

Product Name Partial Credit Guarantee
Link to Product Website
Provider Name IADB (Inter-American Development Bank Group)
Product Definition Several types of comprehensive all-risk credit guarantees are available, and the Bank has flexibility to tailor such credit enhancements for each transaction. In such programs, the IDB covers a share of the credit risk as needed for transactions that develop the local capital markets, activate and develop trade finance, and/or facilitate host country infrastructure development by supporting corporate and project bond placements.

The IDB financial guarantee helps to improve placement with investors and achieve better financing terms from issuers, or increase availability of funds to exporters by providing credit enhancement to bank portfolios. All-risk credit guarantees are tailored on a case-by-case basis to provide the most effective credit enhancement of the guaranteed amount according to the needs of each client and the necessities of the local capital markets participants.

Project Limits: Per project limits that apply to credit guarantees are the same as those that apply to direct loans. The IDB's participation in any single private sector project is limited to US$200 million; however, the Bank may increase that amount to US$400 million on an exceptional basis. The IDB limits is participation to 25 percent of the total project cost, or up to 40% for projects located in certain countries---typically smaller economies with limited market access. For expansion projects, the IDB may provide up to 50 percent of total project costs, subject to certain limits related to the total capitalization of the issuer.

Product Type Partial Credit Guarantee
Defined Risks Covered Political Risks: Regulatory
Political Risks: Breach of Contract
Political Risks: Expropriation
Political Risks: Devaluation
Political Risks: Currency Transfer and Convertibility
Political Risks: War and Civil Disturbance
Commercial Risks: Counter-Party Performance
Commercial Risks: Demand
Commercial Risks: Construction
Comprehensive Risk
Sub-sovereign Risk
Other Risks
Eligible Form of Investments Bonds
Bank Loans
Eligible Currency of Underlying Investment Covered by this Product Both local and foreign currency
Eligible Countries & Regions
Argentina   Bahamas   Barbados  
Belize   Bolivia   Brazil  
Chile   Colombia   Costa Rica  
Dominican Republic   Ecuador   El Salvador  
Guatemala   Guyana   Haiti  
Honduras   Jamaica   Mexico  
Nicaragua   Panama   Paraguay  
Peru   Suriname   Trinidad and Tobago  
Uruguay   Venezuela  
More on Eligible Countries
Eligible Applicants All
Eligible Sector Seaports
Maximum Tenor 10+ to 15 years
Max. Absolute Amount (USD) 100+ to 250 MM
Max. % of Project Costs Covered Max./under 25%
Max. % of Export Content Covered Over 85+%
Fees Fixed
- Analysis fees, a commitment fee on the undisbursed balance, an one-time front-end fee, a structuring fee and annual administration fees.

Other Conditions Sovereign Counterguarantee: No
Anti-Corruption and Governance Standards: Yes link
Environmental standards: Yes link
Social standards (incl. Human Rights Standards; Labor Rights Standards): Yes
Others: Sector Strategies
More on Other Standards
Source(s) n.a.
For more information, contact
Structured and Corporate Finance Department, IADB (Inter-American Development Bank)
1300 New York Avenue N.W.
Washington, DC 20577
Email: SCF@iadb.org
Attachments n.a.
Additional Links n.a.
Deals Chile, Santiago-Valparaiso Toll Road, 2000
Peru, IIRSA Northern Amazon Hub, 2006

Provider Name IADB (Inter-American Development Bank Group)
Institution Type PUBLIC: Multilateral Development Bank
Ownership Owned by 47 member countries
Head Office IDB Headquarters 1300 New York Avenue, N.W. Washington, D.C. 20577, USA
Provider Home Country United States
Rating n.a.
Main Risk Mitigation Products Loans
Grants
Guarantees
Equity Investments
Technical Cooperation
Financing Solutions
Attachments n.a.
Additional Links www.iadb.org
www.iadb.org/projects/index.cfm?language=english
www.iadb.org/NEWS/Article.cfm?arttype=PR&language=EN&parid=2
www.iadb.org/aboutus/VII/index.cfm?language=English
Entered On: 07/02/2007 at 04:05 PM
Updated On: 02/09/2012 at 03:55 PM