Press Release
Wednesday, May 10, 2006OPIC BOARD APPROVES $350 MILLION FOR LENDING FACILITY TARGETING CAFTA COUNTRIES, HOUSING CONSTRUCTION
WASHINGTON, D.C. – The Board of Directors of the Overseas Private Investment Corporation (OPIC) today approved $350 million in financing for a lending framework that will enable National City Bank to expand its lending in emerging markets, with a focus on housing construction loans in signatory countries of the Central America-Dominican Republic-United States Free Trade Agreement (CAFTA-DR).
The framework agreement is OPIC’s third with National City. OPIC committed $35 million to the first in 2003, and $200 million in 2004 to the second. National City expects that prospective transactions totaling $213 million will utilize both frameworks’ funding within the next six months.
Of the $350 million in new OPIC financing, $100 million will be used for housing construction loans for low- and middle-income housing, with a special emphasis on CAFTA eligible countries. As well, at least 60 percent of the framework’s loans will be required to support small and medium-sized enterprises (SMEs) or residential mortgages. In addition to Latin America, National City will focus on member banks in Central and Eastern Europe.
As with the previous OPIC-National City frameworks, OPIC will share risk with National City in loans underwritten by the bank either directly or through its member banks to qualified customers, SMEs, middle market businesses and homeowners in OPIC-eligible countries.
“This new framework with National City will enable OPIC to mobilize capital to finance the expansion of existing businesses and the creation of new ones, which will, in turn, generate thousands of jobs in emerging markets,” said OPIC President and CEO Robert Mosbacher, Jr. “Its emphasis on housing construction in CAFTA countries, in particular, will result in the provision of much-needed credit for a sector vital to the region’s economic growth.”
The strong private/public relationship National City has established with OPIC has provided us with a base from which we have leveraged our highly successful domestic banking capabilities to grow internationally,” explained George O. Fowler, senior vice president of International Markets and Financial Institutions at National City. “Especially rewarding is the ability to bring new financial services to developing and emerging markets. Every National City employee involved in these lending facilities feels a sense of fulfillment when we help to bring private home ownership in Central America or help small business owners to expand in emerging Eastern European markets.”
OPIC was established as an agency of the U.S. government in 1971. It helps U.S. businesses invest overseas, fosters economic development in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, and supports U.S. foreign policy. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers.
OPIC’s political risk insurance and financing help U.S. businesses of all sizes invest in more than 150 emerging markets and developing nations worldwide. Over the agency’s 35-year history, OPIC has supported $164 billion worth of investments that have helped developing countries to generate more than 732,000 host-country jobs and $13 billion in host-government revenues. OPIC projects have also generated $69 billion in U.S. exports and supported more than 264,000 American jobs.
National City Corporation (NYSE: NCC), headquartered in Cleveland, Ohio, is one of the nation's largest financial holding companies. The company operates through an extensive banking network primarily in Ohio, Illinois, Indiana, Kentucky, Michigan, Missouri and Pennsylvania, and also serves customers in selected markets nationally. Its core businesses include commercial and retail banking, mortgage financing and servicing, consumer finance and asset management.
In addition to the millions of dollars loans used to assist US companies establish foreign subsidiaries through OPIC and a comprehensive set of international payment and collection services, National City’s international banking division works to help foreign and domestic companies leverage the bank’s extensive experience in export finance to grow their businesses worldwide. National City offers a full line of cross-border financing and credit, including structured trade finance, letters of credit, multicurrency loans, alternative financing and a host of web-based products and services to meet the demands the global enterprise.