Factorline aims for leasing to represent 10% of portfolio by end-2011

Friday, April 1, 2011

Chile's largest non-bank factoring company, Factorline, expects its leasing business to double growth this year and represent 10% of its total loan portfolio by the end of 2011 compared with the current 6%, Factorline CEO Sergio Contardo told BNamericas.

The company's loans grew 47% last year to 266bn pesos (US$560mn). Leasing was the fastest-growing segment, expanding 98%, followed by car loans and factoring at 47% and 43%, respectively.

Factorline brought a seasoned executive from the country's largest bank, Santander Chile (NYSE: SAN), to head its leasing unit and recruited several executives to drive the company's projected growth in that area, Contardo said.

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"Growing in the leasing sector makes a lot of sense for us as there are many synergies with our existing customer base in the factoring business, which is mainly comprised of SMEs," Contardo said.


To finance growth in the leasing segment, which is measured in Chile's inflation-linked unit known as the UF, Factorline will on April 12 or 14 make its largest bond issue ever. The issue will be comprised of three tranches. Two of them will be denominated in UFs with seven and 10-year maturities for up to 2.3mn UFs (49.6bn pesos) each.

The bond's third tranche will be denominated in pesos, have a five-year maturity, and will be for up to 25bn pesos. The company has not yet decided which series or combination of series it will place, Contardo said.

Banchile Citi Global Markets will lead the placement.

In October, Factorline bought a 50% stake in local finance services company Tanner as part of a plan to double its size within four years.

The Chilean Massú group controls Factorline, and World Bank private sector arm IFC holds an 18% stake in the company.