Bayer Farmers

completed

The proposed IFC project entails providing a risk sharing facility (“RSF”) in partnership with Raiffeisen Bank Aval (“Aval” or the “Bank”) of up to $70 million on the portfolio of receivables generated by Bayer Ltd. Ukraine (“Bayer Ltd” or the “Company”) on the sale of crop protection products to existing and new farmer-clients. The Bank will provide a guarantee to farmers which will allow them to buy on credit from Bayer. An RSF will be signed with Aval on a portfolio of up to U$140 million equivalent with an IFC exposure of up to $70 million, under which IFC will share with the Bank 50% of principal losses on a portfolio of guaranteed Promissory Notes and guarantees to farmer- clients. IFC will have a first-loss counter-guarantee from the Company. Aval is a universal commercial bank ranked number four in Ukraine by total assets as of December 31, 2010, and offering a full range of banking services to all kinds of customers – from big corporate to individuals. The Bank has a well established network of branches with around 930 outlets present in all regions. Aval deals with agri-businesses and has strong agri-finance record in the country. Since October 2005, close to 96% of the Bank’s equity has been owned by Raiffeisen International Bank Holding AG (since October 2010 - Raiffeisen Bank International or “RBI”), a fully consolidated subsidiary of Raiffeisen Zentralbank Österreich AG (“RZB”). The remaining stock (ca. 4%) is traded at the local stock exchange. Raiffeisen International has been a long-standing IFC client since 1987, and Aval has benefitted from three investments in the recent past: two subordinated loans in total amount of $70 million, a senior loan of $15 million, and a GTFP line of $30 million.Bayer Ltd., a Ukrainian entity fully owned by Bayer AG, is a main input supplier of crop protection products (mainly pesticides, herbicides and fungicides) in Ukraine with revenues of about US$100 million per year. The Company’s clients are mainly represented by small and medium farmers. Bayer Ltd. operates under the CropScience division of Bayer AG.