HVB Bank Bulgaria EAD

MIGA recently provided Bank Austria Creditanstalt AG with a €23.8 million guarantee for its €25 million shareholder loan to HVB Bank Bulgaria EAD. The loan will allow HVB Bulgaria to further expand the financing it provides to Bulgarian companies. MIGA's coverage is for a period of up to eight years and provides protection against the risk of transfer restriction.

The project is consistent with Bulgaria's broader development strategy, supported by the World Bank Group, which focuses on the promotion of competitive private sector-led growth. MIGA's support will help HVB Bulgaria provide additional medium-term financing to businesses, especially small and medium-size enterprises (SMEs). The increased availability of funds with longer tenors is expected to have a positive impact on the financial sector as well, and will generate competitive loan pricing and terms for Bulgarian companies in addition to improving SMEs' access to financing.

At year end, HVB Bulgaria will merge with Biochim, Bulgaria's fourth largest bank, which was acquired by Bank Austria Creditanstalt in October 2002. As a subsidiary of the leading Austrian bank, the bank expects to play a leading role in the ongoing process of privatization in Bulgaria, providing know-how, technical solutions, and new products to the market.