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