José Carlos MirandaExecutive Director - Brazil and Suriname

Trade Finance and Multilateral Financing in BrazilJune, 2009

IICInter-American

Investment Corporation

Private sector and non-sovereign guaranteed operations

Sovereign guaranteed operations

SCFStructured and

Corporate Financing Department

IDBInter-American

Development Bank

MIFMultilateral

Investment Fund

Inter-American Development Bank (IDB)Inter-American Development Bank (IDB)

Structured and Corporate Finance DepartmentStructured and Corporate Finance Department

Goal

Primary operational responsibility for the Bank's financing without sovereign

guarantees from the central government.

Target Clients

Private an state-own utilities and/or infrastructure operators.

Private and state-own banks with assets above US$500 million and other financial intermediaries.

Privately controlled entities in all sectors of the economy with annual revenues of US$100 million and above.

Largest regional multilateral institution with 48 member countries dedicated to accelerate economic & social development in Latin America and the Caribbean

4

IDB’s Competitive AdvantagesDeep Knowledge and Excellent Relations with Latin America and the Caribbean

Oldest and largest multilateral lender to Latin America and the Caribbean

Cooperative of 48 regional and non-regional countries

Helps mitigate political risks

Exemption from withholding taxes on debt service payments and de facto preferred creditor status

Solid Financial Position

AAA/Aaa Rating (S&P, Moody’s)

Authorized capital of US$101 billion

Ability to extend tenors at market pricing

IDB Value-Added

Umbrella effect: Unique ability to open channels of communications with governments, communities and other regional entities provides comfort to borrowers and helps to attract other commercial lenders to transactions.

Catalytic role: IDB partners with other commercial lenders to help mobilize financing.

Honest broker: Internationally recognized environmental, social, labor and health standards provide comfort to governments, communities, lenders and sponsors.

Products and Services: Flexible risk sharing arrangements, no country exposure limits and ability to mobilize grant financing to support preparation and execution of strategic transactions.

Work with Us

US$200 million per project** / 50% of project cost. 25-40% if greenfield

Loans in US dollars and guarantees in US dollars and local currencies

Private or state-owned corporate entities and financial institutions*

All economic sectors, with special focus in infrastructure, financial markets and “green” projects*

Limits

Currency

Clients

Sectors

* Exceptions: negative exclusion list** Up to US$400 Million in Exceptional Cases

Ownership: controlled by investors from IDB members countries

Location: benefiting LAC economies

Environmental and Social Standards: IDB policies applies

Other

Operational Performance

$316 $334$457

$683

$920

$2,289

$32$231

$26$130

$566

$1,455

$1,756

$2,974

20

28

16

41

6

9

5

2002 2003 2004 2005 2006 2007 2008

Total (A-Loans plus Guarantees) B-Loans # of Deals

New Commitments

US$ Millions and # of Deals

Commitments – Historical Composition

Energy, 46%

Capital Markets, 14%

Trade Finance, 10%

Transportation, 10%

Communications, 7%

Bio-Energy, 1%

Oil and Gas, 2%Investment Funds, 3%

Financial Institutions, 4%

Water, 3%

Financial Products: Commercial Loans

Characteristics

A-Loan: Direct loan facility from IDB own resources.

A/B Loan: “Syndicated” facility where the Bank works with banks and institutional investors to participate them on a co-financing basis with the IDB through the sale of loan participations, or “B Loans.” The IDB acts as Lender of Record and Administrative Agent for the entire A plus B loan facility.

Terms and Conditions

Interest Rates: Fixed or floating interest rates over Libor. Spread priced according to existing market conditions and reflecting the overall characteristics of the underlying project

Seniority: Senior and/or subordinated loans

Tenors: up to 30 years (average: 10-15 years)

Currency: US$ Dollars and local currency, when hedging is available.

Preparation and Execution Fees: Typical fees charged by commercial banks including analysis fees to evaluate the project, up front and structuring fees.

Financial Products: Partial Credit Guarantees

Characteristics

Credit enhancement from the IDB to allow borrowers to access to better financing terms from domestic and foreign lenders or investors or target institutional investors restricted to invest in non-investment grade obligations.

Terms and Conditions

Currency: partial credit guarantees can be issued to enhance credit obligations in US$ Dollars and local currency. Eventual payments and reimbursement claims are in the currency of the guarantee.

Guarantee Fees: Annual guarantee fees for credit guarantees are charged on a similar basis as a percentage of the approximate spreads charged for long-term loans. Rates are based on several considerations, including the tenor of the underlying loan, financial and corporate market benchmarks, and the overall risk characteristics of the project.

Preparation and Execution Fees: Same as of Loans

Financial Products: Grant Financing

Characteristics

Non-reimbursable and contingent recovery financing for specific activities related to project preparation and execution. For contingent recovery operations, the funds are recovered if and when the project formalizes its financing.

Eligible Activities: Preparation of pre-feasibility and feasibility studies including technical, economic, financial, credit, environmental, social, energy audits, institutional and other types of analyses.

Terms and Conditions

Grant Size: Support from the IDB or its Trust Funds typically does not exceed US$1,500,000 per operation.

Eligible Beneficiaries: Private, state-own and mixed-capital entities from all IDB member countries.

Counterpart Financing: The beneficiary entity/ies shares the financial costs of each operation by an amount to be decided on a case-by-case basis, and typically is never lower than twenty percent (20%) of the total cost of the project.

Trade Finance Facilitation Program (TFFP) - Guarantees

Characteristics

Nature: Credit Guarantee (“CG”) in favor of Confirming Banks to cover the risk they take on eligible trade financing instruments issued by LAC Issuing Bank

Participants: Issuing Banks: Private or state-owned banks incorporated in IDB Borrowing Member Countries, track record in trade finance, satisfactory credit worthiness, compliance with IDB standards Confirming Banks: Any international/regional bank with recognized track record in international trade financing

Terms and Conditions

Applicable Exposure Limits: Max. total program exposure: USD 1 billion Max. country limit: USD 300 million

Tenor (individual transactions): Up to 3 years

Coverage level: Up to 100% per individual transaction

Eligible Transactions: (i) Letters of Credit, (ii) Export and import financing funded by Confirming Banks and (iii) International Guarantees (Bid, Performance, Advance Payment Bonds) and Stand-by Letters of Credit

Currency: USD, Euro, Yen and other currencies

Costs: No joining costs. Usually, guarantee fees equivalent to 75-85% of confirmation fee/spread on the TFFP-guaranteed amount depending on the percentage of the IDB guarantee

Trade Finance Facilitation Program (TFFP) – Short Term Loans

Characteristics

Nature: Portfolio–based trade finance loans

Participants: Issuing Banks: Private or state-owned banks incorporated in IDB Borrowing Member Countries, track record in trade finance, satisfactory credit worthiness, compliance with IDB standards Confirming Banks: Any international/regional bank that are part of the program

Terms and Conditions

Applicable Exposure Limits: Max. total program exposure at any time: USD 1 billionMax. country limit: USD 300 million

Tenor (individual transactions): Up to 360 days

Minimum loan amount: USD 1 million

Eligible Transactions: Portfolio of qualified trade transactions

Currency: USD

Possible Confirming Bank participation: As a Co-Lender As B-Lender to benefit from IDB’s preferred credit status

Costs: No joining costs. Price will be in accordance with current market conditions at the time of disbursement

Member of the IDB Group

The only regional multilateral institution in the world mandated by its member countries to provide financing to private enterprises in Latin America and the Caribbean, particularly those that are small and medium in size

To date we have made more than US$3.368 billion in loans to and investments in:

nearly 550 companies

more than 956,625 SMEs indirectly

In 2008, the IIC approved 64 projects and programs

Total: US$300.5 million

The Inter-American Investment Corporation

Financial solutions

Environmental management and labor considerations

Resource mobilization

Business management

know-how and good practice

specialized technical advisory services

Technical assistance for SMEs focused on the following key areas:

pre-investment consulting services

technical assistance as part of the approval process for SMEs

post-investment technical assistance for IIC clients

What makes us different?

loans (short-, medium-, and long-term in U.S. dollars and in local currency in certain markets; subordinated loans; syndicated A/B loans)

partial credit guarantees for loans and debt securities; equity and quasi- equity investments

financing through supply chains

tailored technical advice for improving financial, environmental, and business management

small business loans in certain markets

What we offer companies

lines of credit for expansion projects

working capital lines

financial and operating lease lines

trade finance facilities

syndicated A/B loans

agency lines

loan and bond issue guarantees

What we offer financial intermediaries