MIGA Expands Coverage for Commercial Bank Loans: Wireless Telecommunications Project in the Slovak Republic

MIGA Expands Coverage for Commercial Bank Loans: Wireless Telecommunications Project in the Slovak Republic

March 1, 1999 — For the first time, MIGA provided 95 percent insurance coverage for commercial bank and shareholder debt financing, enhancing its ability to play an important role in international project finance. MIGA insured a portion of the expansion of EuroTel Bratislava a.s., one of two nationwide wireless telecommunications providers in the Slovak Republic. MIGA issued Euro-denominated insurance equivalent to US$21.3 million for long-term loans made by Bank of America, Citibank N.A., and ABN-AMRO Bank N.V., and US$3.8 million for shareholders' loans extended by MediaOne Group and Bell Atlantic Corporation.

The total cost of EuroTel's GSM expansion is estimated at US$250 million, including a US$150 million capital investment to increase network capacity and a US$100 million refinancing of short-term bridge loans. The project will help to address rising demand for high-quality telecom services in the Slovak Republic. The resulting capacity increase is expected to accommodate approximately 250,000 new subscribers to EuroTel's digital wireless network in the next two years.

Mr. Steve Johnson of Bank of America's Structured Finance Group, London, congratulated the participants in the financing: "It was really important for EuroTel, and I think the country as a whole. It was a real team effort and everybody who contributed to the deal should feel proud to have been involved."

Ms. Elizabeth Stanley, Director of Telecoms and Media Project Finance at Citibank, London, added: "The involvement of MIGA made this deal a reality. MIGA's support and enthusiasm played a critical role in this highly innovative deal structure."

Mr. Roger Pruneau, Vice President of MIGA Guarantees, reaffirmed MIGA's capability to insure loans by commercial banks: "MIGA is proud to extend its guarantee facility to promote long-term loans by commercial banks, in developmentally sound, foreign-sponsored projects."