Mercator-H-d.o.o.

MIGA has provided €7.6 million ($8.7 million) in reinsurance coverage to the Slovene Export Corporation (SEC), the official Slovene Export Credit Agency, for its guarantee to Poslovni Sistem Mercator d.d. (Mercator) of Slovenia for its €28.2 million equity investment in Mercator-H d.o.o. (Mercator Croatia) in Croatia. MIGA's reinsurance is for up to ten years and covers against the risks of transfer restriction, expropriation, and war and civil disturbance.

Mercator Croatia operates three shopping centers/hypermarkets in Pula, Zagreb, and Split, as well as approximately 80 smaller stores. Mercator Croatia is one of the largest foreign retail companies active in the Croatian market and has become an important component of that market. MIGA's reinsurance comes in the form of a debt-to-equity swap, which is aimed at improving the financial structure and performance of Mercator's subsidiary.

The project has positive macro-economic development impacts for Croatia including payment of an estimated €13.6 million in taxes and import duties through 2005. Moreover, Mercator Croatia will have significant upstream benefits for both Slovenia and Croatia through a local procurement policy. The three hypermarkets have created 629 local jobs with on- and off-site training. The project will also play an important role in the community by conducting humanitarian and charitable campaigns such as donations to several hospitals in Croatia and Bosnia and Herzegovina.

A priority objective of the reinsurance is to free up SEC's capacity to facilitate future Slovenian investments into Croatia and allow SEC to diversify its portfolio.