The Bank and its affiliates are owned by two foreign shareholders, Brookfield Asset Management Inc. (Brookfield, formerly known as Brascan Corporation) with a 60% shareholding and Mellon Financial Corporation (Mellon), with 40%. Mellon acquired its 40% in 1998, motivated by its desire to participate in the growing market for asset management in Brazil, as well as to have a Brazilian vehicle for providing services to its corporate customers.
Brookfield is a Canadian specialist asset manager focused on property, power and infrastructure assets. It has approximately $40 billion of assets under management, located in North America, Europe and Latin America. Brookfield is one of the largest property investors worldwide, with $15 billion of property assets. It has had a presence in Brazil since 1899 and is currently active in the financial markets through Banco Brascan and its subsidiaries, as well as in the real estate, power generation, forest, agribusiness and chemical sectors. Brookfield is publicly listed on the NYSE and the TSX under the symbol BAM.
Mellon is a global financial services company headquartered in Pittsburgh, Pennsylvania, USA. With approximately $4.9 trillion in assets under management, administration or custody, including $808 billion under management, Mellon is one of the world’s leading providers of financial services for corporations, institutions and individuals. Mellon provides a broad range of financial products and services through Mellon Asset Management and Private Wealth Management (which make up the Asset Management business group), Asset Servicing and Payment Solutions & Investor Services (which make up the Payments and Securities Services business group), and Treasury Services.

The proposed IFC investment is a $30 million senior loan for IFC’s own account It will be structure as an A loan in USD and/or as a cross-border, local currency-indexed note to be issued by the Bank. For the latter, IFC will hedge the local currency exposure resulting from this investment in the offshore, foreign exchange markets.

30.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	30.0
Equity

* These investment figures are indicative

Banco Brascan is headquartered in Rio de Janeiro and has a fully staffed branch in Sao Paulo.

The project is expected to have the following impacts:

- Expansion of housing construction:

Mortgage markets under-perform without an adequate supply of housing stock. The project will support housing construction by channeling funds to residential real estate developers. Funding from Banco Brascan will allow developers to leverage their own capital and expand their construction activities.

- Increased access to housing finance:

Housing finance in Brazil is often provided by developers through advance installment sales of housing units to owners. Brascan take-out financing would help free up capital from developers’ balance sheets, allowing them to reinvest this capital in new construction projects.

This project fits into IFC’s broader strategy for housing finance in Brazil, which given current market conditions, includes support for increasing the supply of new housing via construction finance. This project aims to support Banco Brascan’s credit expansion activities involving the residential real estate sector as a key component of its strategy to expand its credit lending.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. During appraisal, IFC will analyze the FI portfolio, and the activities proposed to be supported with IFC financing for types of transactions, size, tenor and industry sectors and determine the Applicable Requirements, if any, that would include a combination of:

- The IFC FI Exclusion List; and/or
- The applicable National Environmental and Social Laws and regulations; and/or
- The IFC Performance Standards.

IFC will also review, if required, the capacity of the FI to manage environmental and social risks and to establish and maintain a Social & Environmental Management System (SEMS). If required, IFC will suggest Supplemental Actions to address any gaps in the SEMS. Based on the review, the project will be required to:

- Develop an, or upgrade, if necessary, any existing Social & Environmental Management System (SEMS), prior to disbursement to the satisfaction of IFC;
- Identify responsible, qualified persons to manage and implement the SEMS;
- Commit to implement the SEMS , to ensure that its investments/activities supported by IFC financing are in compliance with the Applicable Requirements;
- Commit to take action to remedy any gaps in SEMS implementation on an ongoing basis;
- Submit a periodic report to IFC as per a format to be provided by IFC.