Scarce Long-Term Financing. The IIC will provide long-term financing in appropriate conditions to help finance the expansion and modernization of a successful Honduran exporter. Long-term financing, particularly in the amounts required by this project, is difficult to obtain locally. By providing long-term funding, the IIC will allow Del Tr pico to strengthen its financial structure, improve its competitive position, and develop new markets for its products, thus allowing it to better cope with the demanding conditions of the international markets where the Company sells its products. By providing a sub-loan, the IIC is helping to strengthen the Company's capital structure and to turn the financial plan for the project into a viable proposition.
Equity is the most scarce form of capital financing in the Honduran financial market.
By providing quasi-equity, the IIC is strengthening and stabilizing the Company's balance sheet. By providing a longer grace period and the flexibility to defer principal payments when necessary, the sub-loan would permit the Company to implement its expansion and consolidate its new markets without having to face the additional pressure on its cash flow that senior debt would impose.