FERRERE Abogados Paraguay advised the Inter-American Development Bank (IADB) for the senior unsecured loan, which closed on 21 June. The loan was divided into a first tranche worth US$4 million and an uncommitted second tranche worth US$6 million.
The loan will be used to finance a credit product known as Credicedula, which enables low-income informal workers who have limited access to formal financial services to obtain small loans solely by using their identity cards. If the project is successful, it is set to be replicated in other countries.
FERRERE partner Néstor Loizaga notes that the transaction is unique in the sense that all the previous loans which have been granted by the IADB in Paraguay have been structured under New York law, whereas this deal was under Paraguayan law. “This required Carlos [Vasconsellos] and I to review and adapt the agreement’s covenants, financial terms, and ratios in accordance to local laws and regulations,” he notes.
Article published in Latin Lawyer on Monday, 1 July 2013.