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Project Information

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 AS “UniCredit Bank”
Guarantee Holder UniCredit Bank Austria AG
Investor Country Austria
Host Country Latvia
Sector Banking
Gross Exposure ($million) 142.5
Fiscal Year 2009
Status Proposed
Project Number 7951
Environmental Category FI
Date SPG Disclosed June 8, 2009
Project Board Date June 23, 2009

Project Description

This summary covers a guarantee for UniCredit Bank Austria AG’s (UBA) shareholder loan to its wholly owned subsidiary, AS “UniCredit Bank” (ASUB). UBA has applied for a MIGA guarantee of up to $142.5 million (or equivalent euro) for a period of up to eight years against the risks of transfer restriction, expropriation, and war and civil disturbance.

UBA’s shareholder loan will enable the restructuring of ASUB’s operations, especially in their asset/liability management and 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 Latvia.

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. Latvia, 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 Latvia by providing additional liquidity into the real economy.

This investment will also provide the needed funding to ASUB for continued support to its core client base. Corporate clients and SME’s of the ASUB’s loan portfolio are concentrated in the manufacturing, trade, real estate and financial services industries in Latvia. Continued financial support to these industries is critical to Latvia’s economic turnaround. ASUB has corporate offices and branches in Lithuania and Estonia. By extension, the investment also supports development in these countries.

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