OPEC funds Davivienda loans

OPEC funds Davivienda loans

Debt Capital Markets Corporate & Sovereign Strategy Fixed Income Equity Funds Loans Colombia

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The OPEC Fund for International Development, managed by the Organization of the Petroleum Exporting Countries (OPEC), said it has provided a $50 million loan to Colombia's Banco Davivienda in a deal arranged by the International Finance Corporation (IFC).

Davivienda will use the money to offer financing to women-owned micro-, small- and medium-sized enterprises (MSMEs), social housing and green building projects in Colombia, the OPEC Fund said in a press release on Thursday.

"Specifically, the project will support low-income households' access to mortgages and improve female entrepreneurs' access to funding. It will also drive a counter-cyclical action, since many people are facing additional challenges as a result of COVID-19," the OPEC Fund said. 

The 10-year loan marks the OPEC Fund's first private sector transaction in Colombia, it added.

The subordinated loan also helps Davivienda strengthen its capital base under Basel III requirements, the fund said. Colombian securities commission Superfinanciera authorized Davivienda to count the loan as additional paid-in capital, according to a securities filing from the bank.

According to a report last month from Fitch Ratings, four of Colombia's leading banks – Bancolombia, Davivienda, Banco de Occidente and the local subsidiary of Spanish lender BBVA – have adequate liquidity, but they are likely to see profits fall and loan portfolios deteriorate in the wake of the coronavirus crisis.