Recovery is a leading NPL servicing company that operates in Brazil, Argentina and Dominican Republic. Current Recovery shareholders include BTG Pactual, IFC and the company's senior management. Recovery services a total of $5.2 billion and has a staff of 180 people. Recovery acquires and services NPL portfolios from banks, finance companies, and other service providers such as telecommunication companies or utilities. These portfolios include a wide range of assets: from unsecured, small balance consumer loans to residential mortgages and corporate credits of various sizes.

The project consists of an IFC investment of up to $100 million to create a NPL resolution platform through a special purpose vehicle in Brazil.

100.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	0.0
Equity	100.0

* These investment figures are indicative

Based in Sao Paulo, Brazil, the project will be executed nationwide.

(i) Market development: The successful implementation of the project could spark the interest of other market players and evolve into a common practice. Furthermore, this could become an important stabilization mechanism for the Brazilian financial sector; (ii) Best practices: As part of the project IFC would promote international insolvency standards, creditors' rights and collection practices for the resolution of the distressed assets; and (iii) Market transparency: Through this project, IFC would be helping to assign a market value to a NPL portfolio. If successful, the proposed project has the potential to be replicated by other entities in Brazil, increasing this way the level of transparency of financial institution's balance sheets.

(i) Countercyclical role - This transaction will provide IFC the opportunity to play a countercyclical role in the Brazilian financial market, allowing systematic institution to dispose of its non-performing assets through a market based mechanism; (ii)Best Practices - The transaction will help entice best practices for distressed assets collection and resolution; and (iii) Replicability - IFC could replicate this structure with other large players in other markets where similar conditions exist.

This project involves the creation of a Platform to purchase and service portfolios of non-performing loans (mortgage,
consumer, SME, and commercial loans) and has been classified as a Category FI project. Considering the nature of activities
supported, Recovery will be required to: (i) ensure that its Social and Environmental Management System (SEMS) is equipped to handle the S&E risk of commercial NPL assets, to ensure that investments under the Platform are screened and processed to
identify S&E risks, if any, and to avoid supporting activities on the IFC FI Exclusion List or with substantial unresolved social
or environmental issues; (ii) work with applicable commercial assets being resolved to ensure that the projects are operating in
compliance with the IFC exclusion list and the applicable national environmental and social laws and regulations, or have an
action plan to achieve the same within a reasonable time frame; (iii) identify responsible, qualified persons to manage and
implement the SEMS; (iv) apply the labor standards established by the IFC Performance Standard 2: Labor and Working
Conditions; (vi) comply with local consumer protection and other applicable laws and follow international best practices or
professional standards in its collection practices; and (iv) submit annual reports to IFC.