Quick Facts

Countries:
Where the impacts of the investment may be experienced.
  • Latin America and Caribbean
Banks:
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
  • Inter-American Investment Corporation (IIC)
Bank Risk Rating: U
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Board Decision Date: 2017-08-01
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower or Client: Corporates, Financial Intermediaries
The holder of the loan, grant, or other investment.
Sectors:
The service or industry focus of the investment. A project can have several sectors.
  • Finance
Investment Amount (USD): $ 400.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.

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Primary Source

Original disclosure @ IIC website
Updated in EWS: 2017-10-12
Disclosure Date: 2017-06-27
Debt Capital Markets (DCM) Program
IIC-12103-01

Project Description
Development of local bond markets contributes to deepen the financial system and increases countries' resilience to the reversal of capital flows during periods of financial instability; capital markets help mobilize domestic savings for financing long-term investments reducing dependency on external borrowing. Latin America and the Caribbean countries ("LAC") lag other emerging markets regions in terms of capital market development, namely in private sector participation. LAC corporate bond issuances represent only 33% of GDP vs. East Asia with 95% and Eastern Europe with 43%. Corporate bond markets in LAC are also characterized by a high concentration in highly rated companies (AA rating or above), lack of liquidity, small size of corporate issuances and shorter maturities than sovereign bonds. The IDBG is seeking to support LAC private sector issuers in accessing Debt Capital Markets financing with two products both in local currency and USD: (i) partial credit guarantees ("PCGs") that will act as credit enhancement to meet local institutional investors' risk appetite and rating requirements; and (ii) the subscription of debt securities2which is expected to act as "seal of quality" to boost investors' confidence. Private sector issuers are expected to benefit from bond issuances as they provide a more diversified base of financing, and better financial terms (longer maturities, larger ticket sizes, etc.). The Program is expected to contribute to deepen financial systems of LAC.
Investment Description
Contact Information
CONTACT For inquiries about this project contact divulgacionpublica@iadb.org. ACCOUNTABILITY MECHANISM OF IIC The Independent Consultation and Investigation Mechanism (MICI) is the independent complaint mechanism and fact-finding body for people who have been or are likely to be adversely affected by an Inter-American Development Bank (IDB) or Inter-American Investment Corporation (IIC)-funded project. If you submit a complaint to MICI, they may assist you in addressing the problems you raised through a dispute-resolution process with those implementing the project and/or through an investigation to assess whether the IDB or IIC is following its own policies for preventing or mitigating harm to people or the environment. You can submit a complaint by sending an email to MICI@iadb.org. You can learn more about the MICI and how to file a complaint at http://www.iadb.org/en/mici/mici,1752.html (in English) or http://www.iadb.org/es/mici/mici,1752.html (Spanish).