Banco Nacional de Fomento (“BNF”) is Paraguay’s state-owned, national development bank. Its mission is to promote social and economic development with a focus on the agriculture, cattle raising, forestry and export sectors.
BNF was one of the main implementing arms of the government’s Economic Recovery Plan to address the economic fallout of the COVID-19 pandemic. BNF needed to provide significant liquidity to the export sector, which constitutes 35% of Paraguay’s GDP and was strongly affected by the crisis.
Citi acted as mandated lead arranger and lender for a 7-year, USD 100 million loan guaranteed by the Multilateral Investment Insurance Agency (MIGA) under its Non-Honoring of Financial Obligations of State-Owned Enterprises Program. The loan will support credit to productive sectors as part of the government’s COVID-19 Economic Recovery Plan.
BNF was able to obtain their first dollar loan in the international credit markets, which will allow them to provide medium and long-term financing to export oriented cooperatives and corporates. The 7-year tenor and low competitive interest rate obtained are especially important to support the agribusiness sector with new financial products and the recovery of the local market.