COSTA RICA: OPIC LOAN TO CSI LATINA FINANCIAL

UNCLAS SAN JOSE 000543 SIPDIS DEPT FOR EEB/IFD/ODF; STATE PLEASE PASS TO OPIC:LTABERNACKI; STATE PLEASE PASS TO COMMERCE/FCS E.O. 12958: N/A TAGS: CS ECON EFIN PGOV PREL EINV SUBJECT: COSTA RICA: OPIC LOAN TO CSI LATINA FINANCIAL REF: STATE 61411 ¶1. SUMMARY: Embassy San Jose supports the Overseas Private Investment Corporation's (OPIC) proposal for a USD 20 million credit facility to CSI Latina Financial, Inc. (CSI). The Econ and FCS Sections reviewed the proposal and concluded that there were no reasons that the loan should not proceed (reftel A). END SUMMARY. -------------- RECENT COUNTRY EVENTS -------------- ¶2. The hand of the global economic crisis has touched Costa Rica primarily in the form of decreased economic activity and unemployment in select sectors of the economy, notably tourism, construction (particularly activity devoted to resort development, both residential and hospitality),and manufacturing. In contrast to this trend, economic activity and employment in the areas of professional services and medical devices (development and assembly) continues apace. Overall, the global crisis has dragged down the Costa Rican economy as demand in export markets contracted. Predictions on gross domestic product growth for the year currently vary between 0 percent and downward to -1 or, at worst, -2 percent. -------------- INFORMATION ON CSI -------------- ¶3. CSI Leasing Centroamerica S.R.L. maintains operations in Costa Rica and is a member of the Costa Rican-American Chamber of Commerce (AmCham). Embassy review of the company or its affiliate (CSI Leasing Polska sp. Zo.o.) did not produce any information linking the company and / or principals to terrorism, money laundering, corruption, or violations of law. Though we do not have a relationship with this company, our research yielded no negative information regarding CSI Leasing Centroamerica S.R.L. -------------- COMMENT -------------- ¶4. Similar to other ecnomices with strong links to the U.S. marker, credit markets did significantly tighten in Costa Rica since mid-2008. Thus, we support any assistance provided by OPIC that eases commercial and consumer credit in Cost Rica. BRENNAN