UniCredit Bank Hungary Zrt.

MIGA has issued a guarantee of up to €95 million covering UniCredit Bank Austria AG’s (UBA) €100 million shareholder loan to its wholly owned subsidiary, UniCredit Bank Hungary Zrt. (BACH). The coverage is 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.

MIGA supports this project in conjunction with the Financial Sector Initiative framework recently presented to MIGA’s Board of Directors as part of a coordinated international response to the ongoing global financial crisis. Hungary, like many other countries in the Europe and Central Asia region, is currently facing difficult fiscal adjustments along with the need for external financing.  MIGA’s support to the project will supplement the International Montary Fund’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.