42055 - ABL Trust Mexico

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Summary of Investment Information

Project Number

42055

Company Name

CIBANCO S.A. INSTITUCION DE BANCA MULTIPLE ACTING AS TRUSTEE OF AGREEMENT CIB 3511

Date SPI Disclosed

Oct 22, 2019

Country

Mexico

Region

Latin America and the Caribbean

Projected Board Date

Dec 6, 2019

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Nov 12, 2025

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : Jan 13, 2020
Signed : Oct 16, 2020
Invested : Nov 24, 2020

Sector

Leasing Services

Project Description

The proposed project consists of (i) a 5-year senior secured loan for up to MXN2,000 million (~US$100 million equivalent) to a Special Purpose Vehicle (Trust or the Borrower); and (ii) up to 400 million (~US$20 million equivalent) to be committed at a later stage in form of a credit enhancement (PCG) or a senior pari-passu participation in the Trust’s issuance in the capital market. On a first stage, the Trust will acquire and hold the receivables from leased assets originated by up to three different Mexican leasing companies. On a second stage, once the portfolio of leased assets reaches a critical size, the Trust is expected to place the structure in a private/public issuance. At that time, IFC will provide either a credit enhancement or participate as anchor investor through a senior pari-passu investment of up to 20% of the issuance.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	21.14
Loan	105.72
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Guarantee	Loans to SME Borrowers
Straight Senior Loan	Loans to SME Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

By taking advantage of economies of scale and leveraging on the asset quality/base of the leasing companies, the Project's expected project level outcomes are a higher SME reach when compared to projects done on an individual basis and granted under traditional lending schemes. Preliminary numbers show that the Project could help each of the medium-sized companies to increase its profitability, hence the capital generation ratio, within the life of the structure.

Financial Additionality: Innovative Financing Structure and/or Instruments. By bringing together up to three companies, IFC will develop an innovative financial structure which is non-existent in the market. Moreover, by joining efforts/splitting costs, the structure will allow them to lower the cost of warehousing their leases. Non-Financial Additionality: (i) Frameworks - catalyzing policy or regulatory change: The Project is expected to catalyze the investment response to the improvement done through the intervention of the FCI Global Practice in the STCR systems in Mexico. If successful, the Project might be replicable by IFC mobilizing resources from interested parties or funded by local commercial banks on their own. (ii) Knowledge, innovation and capacity building: IFC will provide expertise, innovation, knowledge and most importantly the required flexibility to merge the assets from up to three different leasing companies into one structure and align interests.

E&S Category Rationale / Risks and Mitigation

The project will support SME leasing in Mexico. The leased assets will consist primarily motor vehicles and related equipment, but also industrial machinery and equipment. The overall risks of the leasing operations supported are considered primarily low to medium. Therefore, the project has been classified as Category FI-2 according to the IFC’s Sustainability Framework. As part of this transaction, the two leasing companies will be required to assess the activities of the lessees supported against the IFC’s Exclusion List and the Mexican E&S laws and regulations. Lessees involved in coal-related activities including coal mining, coal transportation or coal-fired power plants, as well as infrastructure services exclusively dedicated to support any of these activities will not be eligible under this project.

The main E&S risks and impacts related to the Project derive from the leasing company’s capacity to develop and implement an adequate ESMS to detect risks associated to their customer portfolio including the safe operation and maintenance of the pledged assets. Potential risks on these types of projects may include: occupational health and safety, labor and working conditions, waste and wastewater management, and pollution. The leasing companies do not currently have a formal Environmental and Social Management System (ESMS) and will be required to (i) develop and implement one to screen lessees’ activities against the Exclusion List and host country E&S laws and regulations, (ii) appoint an E&S officer, and (iii) build capacity to identify E&S risks. Additionally, as a part of the IFC loan, the leasing companies and the master servicer will follow IFC’s 2012’s Performance Standard 2 – Labor and Working Conditions and provide an annual E&S report to the IFC that includes the monitoring of leasing transactions.

Contacts

For Inquiries About the Project, Contact

MAS Leasing / JH Leasing
Juan Pablo Rivas / Manuel Fernandez
CEO / CEO
+52 55 5077 0867 / +52 55 5004 8424

info@masleasing.com / info@jhl.mx
https://www.masleasing.com/ http://www.jhl.mx/

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

Task Title & Description	Anticipated Completion Date
Nominate officers	01/13/2020
Establish SEMS	01/13/2020
Staff Training	01/13/2020

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