IFC Invests $30 Million in Global Debt Fund

In Washington D.C.: 
Georg Schmidt 
Tel: + (202) 458 2934 
Email: Gschmidt@ifc.org 

Azam Khan 
Tel.: + (202) 473-1663 
Email: Akhan@ifc.org




Washington, D.C., August 30, 2004—The International Finance Corporation, the 
private sector arm of the World Bank Group, has agreed to make a $30 million 
investment in the $300 million GEM VII Targeted Value and Income Fund. 
Structured as a collateral debt obligation (CDO), GEM VII is the first global 
emerging market debt fund with the ability to invest in the whole universe of 
emerging markets fixed income opportunities ranging from distressed, performing 
and synthetic to local currency instruments. 

The fund will target a globally diversified pool of dollar denominated private 
sector debt issues, both performing and nonperforming. Dollar debt will be 
complemented by emerging markets local currency debt as the fund aims to focus 
investments on about 33 emerging market countries. The fund is managed by TCW 
Asset Management Company. Morgan Stanley was the sole structuring and lead 
distribution agent of the debt and equity to a globally and institutionally 
diverse consortium of investors. 

Teresa Barger, IFC director for Private Equity and Investment Funds, said, "IFC 
can play an important role by encouraging fixed income fund managers to create 
new products that modify the risk/return profile of emerging markets assets. 
This can attract investors who are limited to investment grade securities. 
Emerging markets corporate debt is still plagued by a lack of transparency, 
poor recovery mechanisms, and scant structuring knowledge. Participation by 
top-notch fund managers in this asset class will improve transparency, add 
buy-side perspective to new issuance, and deepen the investor market." 

Nathan Sandler, Managing Director of TCW Asset Management, added, "With TCW GEM 
VII Targeted Value, TCW's ninth emerging market CDO, we have really broken new 
ground.  The fund's unique structure gives us the tools to exploit the full 
range of investment opportunities in the emerging markets and to manage risk 
more effectively.  IFC’s investment has been instrumental in developing this 
fund.  Our cooperation broadens the strategic investor base, mobilizes 
institutional capital for the private sector, and builds innovative investment 
products to meet specific risk preferences and return targets." 

Morgen Stanley’s spokesperson said, “GEM VII is the first CDO to take 
advantage of relative value opportunities in the distressed and local currency 
sectors of the emerging markets. This innovative structure provides the manager 
with optimal flexibility in asset selection and allocation. The senior notes of 
the transaction are wrapped to Aaa/AAA and priced at a historically low level, 
possibly the tightest level ever for an emerging market CDO" 

TCW Asset Management Company is a wholly owned subsidiary of the TCW Group, 
which is an indirect subsidiary of Société Générale.  TCW has approximately 
$100 billion assets under management, including over $2.25 billion in emerging 
market debt. 

The mission of IFC is to promote sustainable private sector investment in 
developing countries, helping to reduce poverty and improve people's lives. IFC 
finances private sector investments in the developing world, mobilizes capital 
in the international financial markets, helps clients improve social and 
environmental sustainability, and provides technical assistance and advice to 
governments and businesses. From its founding in 1956 through 2003, IFC has 
committed more than $37 billion of its own funds and arranged $22 billion in 
syndications for 2,990 companies in 140 developing countries. IFC's worldwide 
committed portfolio as of 2003 was $16.8 billion for its own account and $6.6 
billion held for participants in loan syndications.