IDB, FirstCaribbean to establish regional credit guarantee facility

The Inter-American Development Bank (IDB) and FirstCaribbean International Bank are to establish the first risk-sharing guarantee facility for the Caribbean region.

The facility has been designed to support long-term lending for infrastructure, tourism and mid-size businesses with strong potential to generate jobs and boost productivity.

The IDB has approved up to US$ 200 million in partial credit guarantees to establish the risk-sharing facility, which will support at least US$ 400 million in FirstCaribbean lending to private sector borrowers.

The partial credit guarantees, which may be denominated in US dollars or local currencies, will help FirstCaribbean reduce its corporate credit risk exposure, allowing it to increase its lending to key clients.

Initially the facility will focus on transactions in Jamaica, although it may be expanded to other IDB member countries where FirstCaribbean operates (the Bahamas, Barbados, Belize and Trinidad and Tobago).

FirstCaribbean, which is headquartered in Barbados, was formed in 2002 through a merger of Canadian Imperial Bank of Commerce (CIBC) West Indies Holdings and Barclays' Caribbean operations. The Toronto-based CIBC is the majority shareholder in FirstCaribbean, which does business in 17 countries in this region.

The IDB is the leading source of long-term financing for economic and social development projects in Latin America and the Caribbean. Its Structured and Corporate Finance Department is responsible for non-sovereign guaranteed operations, which include loans and guarantees for private sector companies and state-owned entities.