MIGA issued a $200 million guarantee to Banco Santander Central Hispano S.A. for its shareholder loan to Banco do Estado de Sao Paulo S.A. (Banespa), offering protection against the risks of transfer restriction and expropriation. $150 million of the guarantee was syndicated in the private market. The project supports the expansion of Banespa's operations in Brazil.
Under the project, 50 percent of the loan will go into the expansion of mortgage lending primarily loans to individuals who wish to purchase, construct, or renovate residential buildings, as well as loans to corporations for the purchase of business space. The rest of the funds will enable Banespa to offer lower-cost financing to SMEs, particularly in the agricultural and manufacturing sectors, enabling them to acquire new machinery and equipment. The project will thereby contribute to the expansion of production facilities and the output of companies in these sectors. It is also expected to generate approximately $1.2 million in annual tax revenues.