Wednesday, October 04, 2006
Citigroup, OPIC announce $70mn credit facility with Iraq Bank
Finance
Citigroup, in cooperation with US Overseas Private Investment Corporation (OPIC), yesterday announced the launching of a $70 million structured credit facility for the benefit of the Trade Bank of Iraq (TBI). The move allows it to issue Letters of Credit which would be confirmed by leading financial institutions. The $70 million structured facility was arranged, structured and coordinated by Citigroup's Export and Agency Finance group.
By supporting the bank's reimbursement obligations to confirming banks via a special trust, the trust will facilitate the provision of goods and services vital to Iraq's reconstruction after decades of international isolation. Specifically, the trust will only guaranty reimbursement obligations on TBI letters of credit that are not, or not entirely, supported by export credit agency cover. This unique facility represents the first time commercial lenders such as Citigroup and others are able to extend letters of credit in Iraq that are not fully cash collateralised.
By supporting the bank's reimbursement obligations to confirming banks via a special trust, the trust will facilitate the provision of goods and services vital to Iraq's reconstruction after decades of international isolation. Specifically, the trust will only guaranty reimbursement obligations on TBI letters of credit that are not, or not entirely, supported by export credit agency cover. This unique facility represents the first time commercial lenders such as Citigroup and others are able to extend letters of credit in Iraq that are not fully cash collateralised.
