Overview

CDB provides $40 million loan to National Bank of Costa Rica to support infrastructure and social development projects (Linked to Record ID#35549)

Commitments (Constant USD, 2023)$56,337,843

Commitment Year•2008Country of Activity•Costa RicaDirect Recipient Country of Incorporation•Costa RicaSector•Other MultisectorFlow Type•Loan

Status

Project lifecycle

Pipeline: Commitment

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date: Nov 17, 2008

First repayment (originally scheduled): May 18, 2009

Last repayment (originally scheduled): Nov 16, 2013

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Policy Banks

China Development Bank (CDB)

Receiving agencies

State-owned Banks

Banco Nacional de Costa Rica (BNCR)

Implementing agencies

State-owned Banks

Banco Nacional de Costa Rica (BNCR)

Collateral providers

State-owned Banks

Banco Nacional de Costa Rica (BNCR)

Loan desecription

CDB provides $40 million loan to National Bank of Costa Rica to support infrastructure and social development projects

Grace period•0.5 yearsGrant element•11.0918%Interest rate (t₀)•4.91375%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•5 years

Collateral

The loan requires the borrower to deposit Collateral into a Pledge Account. Collateral means 'any securities eligble for deposit in the Collateral Service Agent's system'. (Definition of Collateral in the Loan Agreement). The Pledge Account is an account opened by the Borrower with the Collateral Service Agent for the purpose of holding Collateral, in accordance with a seperate pledge agreement. The Pledge Account is expected to hold unrelated securities as as source of collateral. The cash value of these unrelated securities must be at least as much as the outstanding value of the loan. See Clause 17(a)-(b) in the loan agreement for more details.

Narrative

Full Description

Project narrative

On November 17, 2008, China Development Bank (CDB) and the National Bank of Costa Rica -- a state-owned bank in Costa Rica -- signed a $40 million facility agreement. The proceeds of the loan were to be used by the borrower to support infrastructure and social development projects in Costa Rica. The loan carried the following borrowing terms: a maturity of 5 years, a grace period of 0.5 years, an interest rate of 6-month LIBOR plus a 2.2% margin, a 2% default (penalty) interest rate, a commitment fee of 0.30%, and a one-time, upfront (management) fee of 0.60%. The borrower was responsible for making 9, equal semiannual repayments. Revenue from financial assets was collected in a collateral pledge account, out of which debt service was paid.

Staff comments

1. The CDB facility (loan) agreement can be accessed in its entirety via https://www.dropbox.com/s/cemcy1xv0jstun9/2008%20CDB%20Loan%20Agreement%20with%20Costa%20Rica.pdf?dl=0. 2. The CDB loan agreement specifies that '[a]t any time after the first repayment date, CDB shall have the right to request the borrower in writing, and the Borrower shall have the obligation […] to (i) enter into the Pledge Agreement with CDB and the Collateral Service Agent [which is Clearstream Banking in Luxemburg] and (ii) deposit into the Pledged Account Collateral [defined as any securities eligible for deposit in the Collateral Service Agent’s system] with an aggregate current value determined by [Clearstream Banking] to be no less than the amount of the Loans then outstanding.' Afterwards the borrower has to ensure that the pledged account always contains collateral with a value not less than the outstanding amount until the final maturity date. 3. This CDB loan is not captured in the China-Latin America Finance Database, which is co-produced by the Inter-American Dialogue and Boston University’s Global Development Policy Center.