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Summaries of proposed guarantees are provided prior to Board consideration and final contract signing, and therefore are subject to change. Project briefs are disclosed after contract signing and do not reflect subsequent modifications (e.g., changes in guarantee amount).
Project Name UniCredit Bank Hungary Zrt.
Guarantee Holder UniCredit Bank Austria AG
Investor Country Austria
Host Country Hungary
Sector Banking
Gross Exposure ($million) 127.80
Fiscal Year 2009
Status Proposed
Project Number 7980
Environmental Category FI
Date SPG Disclosed May 06, 2009
Project Board Date May 21, 2009

Project Description

This summary covers a guarantee for UniCredit Bank Austria AG’s (UBA) €100 million shareholder loan to its wholly owned subsidiary, UniCredit Bank Hungary Zrt. (BACH). UBA has applied for a MIGA guarantee of up to €95 for a period of up to six years against the risks of transfer restriction, expropriation, and war and civil disturbance.

UBA’s shareholder loan will provide BACH with long-term liquidity, help restructure BACH’s operations by improving the bank’s asset-liability management and improve its structural liquidity.  The loan is part of a broader funding strategy of the UniCredit Group to finance its subsidiaries and is particularly important in view of the current turmoil in financial markets worldwide, including Hungary.

Environmental Categorization

The project is a Category FI under MIGA’s environmental review procedures.

Development Impact

MIGA supports this project in conjunction with the Financial Sector Initiative framework recently presented to the Board as part of a coordinated international response to the ongoing global financial crisis. Hungary, like many other countries in the ECA region, is currently facing difficult fiscal adjustments along with the need for external financing.  MIGA’s support to the project will supplement the IMF’s stabilization program for Hungary by providing additional liquidity into the real economy.

This investment will also provide the needed funding to BACH for continued support to its core client base, including small and medium-sized enterprises, large companies as well as private individuals.

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