BCP S.A.

As part of its CUP with private political risk insurers from the United Kingdom and the United States, MIGA issued a contract of guarantee for $230 million to ABN AMRO Bank N.V. of the Netherlands, acting as agent for itself and on behalf of an international syndicate of lenders, including Bank of America and Westdeutsche Landesbank (WestLB). Coverage was offered for a nonshareholder loan to BCP S.A. (Brazil) against the risks of transfer restriction and expropriation. Five Lloyd's syndicates—ACE Global Markets, Brockbank, S.J. Catlin, Cox Insurance Holdings, and H.H. Hayward—participated in the CUP, together with Chubb & Son and Unistrat Corporation of America.

BCP S.A. is a subsidiary of Bell South Corporation (the U.S. telephone operator) and the Safra Group (a major financial institution in Brazil). The project involves establishing and operating a cellular telecommunications network in the São Paulo metropolitan area under a 15-year renewable concession agreement, which BCP S.A. won in 1997.

MIGA insurance will support the liberalization and privatization of Brazil's infrastructure sector. This project will likely improve availability and quality of telephone services at lower cost. It will yield immediate benefits to some 18.5 million people (or 11 percent of Brazil's population) within the region covered by the network. BCP S.A. will provide new telecommunications infrastructure by establishing a modern digital cellular network, and it will increase competition among telephone service providers. BCP S.A. expects its subscriber base to increase from 1.2 million to 3.2 million in five years. By offering prepaid services, BCP S.A. will make cellular phone services affordable to people with lower incomes.

BCP S.A. already has paid a concession fee of $2.4 billion and is expected to hire 800 more people within the next three years.