IFC Press Release – IFC Arranges $280 Million Investment in Odebrecht Group in Brazil

Washington D.C., July 2, 2002—The International Finance Corporation, the private sector development arm of the World Bank Group, has arranged a US$280 million investment to strengthen the financial structure of Construtora Norberto Odebrecht (CNO), the largest Brazilian engineering and construction company.

IFC is providing a loan for its own account of up to $80 million and arranged a syndicated B loan of up to $165 million for the account of participant banks. Banc of America Securities joined the syndicated B loan as Senior Lead Arranger and Joint Book Manager; Caterpillar Financial Services Corporation and Brasilian American Merchant Bank (a subsidiary of Banco do Brasil) joined as Lead Arrangers; Caixa Geral de Depositos S.A and International Finance Participation Trust participated as Co-Arrangers; and Banco Espirito Santo S.A., Caja de Ahorros del Mediterraneo, Credit Lyonnais and IKB Deutsche Industriebank AG joined as Participants.

In addition, IFC helped mobilize a local currency parallel loan of $35 million equivalent to be provided by HSBC Bank Brasil S.A. – Banco Multiplo, Banco de Investimentos Credit Suisse First Boston S.A., Unibanco S.A. and Banco Credit Lyonnais Brasil S.A..

“The investment in CNO exemplifies our continued support to Brazilian companies that are major private sector economic actors and employers. It also shows that IFC is committed to assist companies in emerging markets which are having limited access to long term financing under the current market conditions”, said Bernard Pasquier, IFC’s Director of the Latin America and Caribbean Department. Mr. Pasquier added: “This investment will also help demonstrate the benefits of improved corporate governance practices and transparency, and will support the Brazilian government’s efforts in this area.”

Paul Altit, Chief Financial Officer of CNO, said: “We are very pleased with this important strategic investment which will strengthen Odebrecht’s relationship with IFC and the participant banks at an opportune time. This investment will permit CNO to continue to enhance its qualifications as a diversified engineering and construction company and to finance its ongoing activities, principally in Latin America and Africa”.

CNO, founded in 1945 in the Northeastern State of Bahia, provides state of the art technical expertise in the design and construction of large scale projects, including highways, railways, bridges, tunnels, subways, buildings, port facilities, dams, as well as mining facilities, steel mills, cement plants, among others. CNO undertakes projects in all regions of Brazil as well as in most South American countries, Central America, Europe, the United States and Africa. CNO is a subsidiary of Odebrecht S.A., one of the largest Brazilian private-sector conglomerates in terms of revenues and Brazil’s leading service exporter.

IFC’s mission (www.ifc.org) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.

Since its founding in 1956 through the close of the last fiscal year on June 30, 2001, IFC committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC’s committed portfolio at the end of FY01 was $14.3 billion.