22497 - Ideal Invest

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Summary of Proposed Investment

Project Number

22497

Company Name

Ideal Invest Sa

Date SPI Disclosed

Sep 5, 2008

Country

Brazil

Industry

Health, Education and Life Sciences

Projected Board Date

Oct 31, 2008

Status

Completed

Sector

Colleges, Universities, and Professional Schools

Department

Regional Industry MAS LAC & EUR

Environmental Category

C - No Impact

Previous Events

Approved : Oct 9, 2009
Signed : Nov 9, 2009
Invested : Nov 20, 2009

Project Description

Ideal Invest (Ideal) recently started providing students with access to loans to finance college tuition. Ideal funds these loans in the capital markets through securitizations. The Crédito Universitário Fundo de Investimentos em Direitos Creditórios (FIDC), a vehicle established by Ideal with the sole purpose of buying the student loans originated by financial institutions, issues senior and subordinated securities to fund these purchases. Local investors buy the senior securities and Ideal buys the subordinated securities issued by the FIDC.

Ideal plans to increase its student loans program to approximately R$480 million (approximately $300 million) over the next several years. As the company plans to accelerate the growth of its student loan portfolio, it has asked IFC to provide a credit enhancement to the senior securities in the form of an irrevocable guarantee to buy mezzanine securities, in an amount up to R$60 million (approximately $37 million) in case certain events occur. Combined, the subordinated and IFC’s guarantee to buy mezzanine securities should provide senior investors with sufficient subordination.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	33.57
Equity	1.68

Development Impact

The expected developmental impacts include:

- Expanding access to tertiary education for students looking for flexible and affordable financing alternatives,
- Improving efficiencies in the education system by making tuition flows more predictable for participating universities and reducing drop-out rates,
- Developing capital markets and mobilizing additional private resources in education financing, and
- Supporting the growth of an innovative local entrepreneur.
It is important to highlight that over 60% of Ideal’s student borrowers are first generation college students in their families.

This project involves the establishment of a financial vehicle to securitize student loans originated and serviced by IdealInvest. As such, this financial vehicle will have minimal or no adverse environmental or social impacts, and is classified as a Category C project according to IFC’s Environmental and Social Review Procedure. No further review is required. The company will be required to inform IFC in the event of any change in business that could affect the social & environmental risks of the portfolio and commit to meeting any requirements that may arise with such a change.

Contacts

For Inquiries About the Project, Contact

Oliver Mizne, CEO
Rua dos Pinheiros 870 40 andar
Sao Paulo SP 05422 001

+55 11 33181600

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IFC Corporate Relations
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Washington DC 20433
Telephone: 202-473-3800
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E Mail: Webmaster

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

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.

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