Press Releases

World Bank President Zoellick to Visit Central America, Mexico July 19-23

CONTACT: Sergio Jellinek +1 (202) 458-2841, sjellinek@worldbank.org

WASHINGTON, DC/July 16, 2010/World Bank/ -- Robert B. Zoellick will participate in a regional integration summit with Central American heads of state in El Salvador July 19-20 before visiting Mexico July 21-23 for talks with President Felipe Calderon and Mexican officials on a range of topics including the Bank's support for Mexico's growing leadership in the climate change debate.

"Central America is a region of tremendous opportunities. I look forward to learning more about Central America's efforts to deepen regional economic integration, and expand economic growth, while also discussing ways that the World Bank Group can support sustained growth with opportunities for all," said Zoellick. "I appreciate President Funes' leadership in hosting this regional integration summit. He's right to see each country's success through the lens of the region's success."

Latin America and the Caribbean is expected to post 4.5 percent growth in 2010, with Brazil leading the recovery with a projected 6.5 percent expansion on account of strong commodity demand. Mexico's growth is projected to rebound to 4.5 percent, marking the fastest growth pace in almost a decade, while Central American economies will post a 2.7 percent growth for 2010.

In El Salvador, July 19-20, Zoellick will meet with President Mauricio Funes to discuss the Bank's El Salvador program. Zoellick will participate in the the Extraordinary Summit of Heads of State of the Central American Integration System, a forum set up in response to President Funes' call for neighboring countries to jointly address their many common development challenges.

Zoellick, who in his former capacity as U.S. Trade Representative launched and negotiated the Central American Free Trade Agreement (CAFTA), stressed the importance of connecting regional integration with the private sector. To that end a special parallel Forum will take place with a broad participation from private sector groups and civil society. The Forum will be moderated by a representative from the INCAE Business School and will report back on its conclusions to the heads of state.

Summit attendees include heads of state and top officials from the Central American Integration System (SICA) comprised of Belize, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and Panama.

The World Bank Group (WBG) supports Central America's development efforts through a diversified menu of programs, innovative financing and knowledge sharing adapted to the specific circumstances of each country, including disaster management. In fiscal year 2010, the World Bank provided US$859 million to support Central American economies in the aftermath of the global financial crisis.

In addition, the World Bank's private sector arm, the International Finance Corporation (IFC), has made investment commitments of US$406 million in fiscal year 2010, a five-fold increase from FY07 (US$77 million). IFC sees regional integration as a strategic objective. In FY10 alone, IFC provided a total ofUS$61 million to four Central American companies in the manufacturing, hotel,retail and insurance industries to support cross-border investments.

During his Mexico visit Zoellick will meet President Calderon to discuss the country's strategic partnership with the Bank and seek ways to deepen its support to Mexico's growing international role in climate change issues, especially in light of the upcoming United Nations climate change COP16 conference to be held in Cancun later this year. Zoellick will also participate in a forum on "Global Trends and Latin America" at the Instituto Tecnológico Autónomo de México (ITAM).

"Mexico is a leading voice on economic and development issues, and we appreciate the strong partnership the World Bank has with President Calderon and the Mexican people," said Zoellick. "Our work with Mexico on its low carbon growth strategies and our support to the Clean Technology Fund program to transform urban transportation in five cities shows the depth of this partnership on the critical issue of climate change."

Mexico has the second largest World Bank portfolio in Latin America. During FY10 (July 1, 2009 - June 30, 2010) the WB approved 9 projects for a total of US$6.4 billion in health, education, transport, energy, water and economic policies. IFC has invested US$1billion projects ranging from microfinance, housing and health and education and promotes infrastructure development, particularly water and renewable energy. Recently, IFC helped arrange the financing of US$375 million for Eurus in Mexico, the largest wind farm in Latin America (250MW).

IMF Mission Arrives in Honduras to Evaluate Finances

CONTACT: xxp69@xinhuanet.com

The IMF team will stay in Honduras till March 25 and will meet Finance Ministry and Central Bank officials, as well as senior government leaders and business leaders.

Honduran Finance Minister William Chong Wong told local media on Monday that the IMF team's visit "is normal, because they arrive in the country every year, but the meeting had been interrupted for the political event of June 28 of last year," referring to the army-backed coup.

"They come to review where we are, to make a diagnosis ... to put the finances in order," Chong said.

Honduras saw some 450 million US dollars in international aid frozen due to the coup as the European Union, the World Bank and Inter-American Development Band all halted funding. However, the World Bank resumed aid to Honduras in February after President Porfirio Lobo's inauguration.

Fitch Affirm CABEI's IDR at 'A-'; Outlook Stable

CONTACT: David Weinfurter, +1 (212) 908-0336, david.weinfurter@fitchratings.com

NEW YORK/March 12/Fitch Ratings/ -- Today, Fitch Ratings has affirmed the ratings of the Central American Bank for Economic Integration (CABEI) as follow:

-Long-term foreign currency Issuer Default Rating (IDR) at 'A-';

-Short-term IDR at 'F2';

-USD500 million medium-term note due 2014 at 'A-'.

The Rating Outlook is Stable. Downward pressure on the rating could arise from further deterioration of CABEI asset quality ratio and an unexpected decrease of its capital ratios.

CABEI's ratings reflect its preferred creditor status and privileges conferred on it by its member countries, as well as its solid fundamentals, including a strong capital base, adequate asset quality and an established track record in terms of self sustainable profitability. The ratings are limited by the volatility of the economic environments in which the institution operates, its significant loan concentration and the member countries' creditworthiness. The ratings also factor in a relatively high average exposure to the private sector and increasing past dues in such portfolio.

CABEI is a Central American multilateral development bank (MDB) based in Honduras. It is not subject to local regulation and is immune from taxation. It is currently 59% owned by its so-called five founding member states - Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. The remaining shares belong to other non-regional members: Argentina, Colombia, Mexico, Taiwan, Spain, Dominican Republic and Panama. CABEI's objective is to fund development projects in Central America by channeling medium and long-term foreign currency resources both to public and private institutions.

CABEI has its headquarters in Tegucigalpa (Honduras), and regional offices in each of the five regional countries. Since mid fiscal year 2009 (FY09), one of its member countries (Honduras) has been suffering mounting political instability, which resulted in the replacement of its President. During such period, and well beyond the end of the year, CABEI's operations in the country has hold well, while its business continuity plan have allowed the entity to keep their business without any interruption.

During 2009, the political turmoil in Honduras not only resulted in a significant deterioration of the economic environment in that country, but also, have resulted in some arrears in the public sector loans (not reaching the non accrual status set up by the entity for this kind of exposure - more than 180 days past due) and also a temporary change on some rules from the Central Bank in regards of deposits from Honduran banks in CABEI. On Aug. 28, 2009, the Central Bank of Honduras decided to exclude CABEI from the list of international banks in which local banks can invest (effective Sept. 30, 2009), such decision resulted in the withdrawal of deposits from Honduran entities in CABEI.

As of today, the new government of Honduras has publicly stated their commitment with CABEI, cleared the aforementioned loan arrears and started the discussion to reinstate the ability of CABEI to accept deposits from Honduran banks; paving the way to come back to normal business relations with the sub regional MDB. In turn, CABEI has announced that restart of loan disbursements of previously approved loans to the country.

The economic recession along the region and the sizable participation of private sector loans (around 35% of the total as of September 2009) have resulted in a significant increase of CABEI impaired loans during 2009. As of September 2009, impaired loans increased to 2.98% of total loans (8.5% of total private sector loans); a trend that may continue due the meager economic prospects of the region. Despite loan loss reserves covered in just 120% the impaired portfolio; current capital levels provide comfort about the ability of CABEI to confront credit losses in the short term.

CABEI capital ratios remain ample (albeit slightly decreasing) and consistent with its current rating. The equity to assets ratio stood at 31% as of September 2009 (2005: 38%); while the bank's usable capital/required capital ratio remains adequate at 2.3 times (x) at the end of December 2008.

IMF To Send Staff To Honduras For Econ Assessment

CONTACT: Meena Thiruvengadam, (202) 862-6629, meena.thiruvengadam@dowjones.com

WASHINGTON, DC/March 11/Dow Jones Newswires/ -- The International Monetary Fund plans to send a staff mission to Honduras next week, the IMF said Thursday.

The team will be the first from the IMF to visit Honduras since a coup toppled the government of former President Manuel Zelaya last summer.

Honduras asked the IMF to make the visit but IMF spokesman Andreas Adriano said the country has not made a request for aid from the fund.

IMF officials, scheduled to be in Honduras from March 15 to March 25, plan to assess the country's economic performance in 2009 and discuss plans for growth.