CAF-AM Uruguay Issues Debt Fund V for Infrastructure Projects and Demand Doubles Available Supply

CAF-AM Uruguay, the asset management company of CAF-Development Bank of Latin America and the Caribbean-, successfully issued the new Financial Trust Debt Fund for Infrastructure in Uruguay V CAF-AM for a total amount of 2,000 million Indexed Units (UI), which will be used to finance infrastructure projects in the country with senior debt for a maximum term of 30 years. In this case, the demand was more than double the available supply of debt securities.

Through BEVSA, offers from institutional investors were channeled in the wholesale tranche for 4,162 million UI, equivalent to approximately US$ 624 million, while offers in the retail tranche were 61,168,336 UI, approximately US$ 9 million, of which 700,000 UI were channeled through BEVSA and 60,468,336 through the BVM.

We are convinced that this fund will represent a new boost for the development of initiatives that will result in improving the quality of life of Uruguayans, such as the Arazatí project, a Service Contract designed by OSE to contribute to the security of the supply of drinking water to the Metropolitan System and localities in the department of San José, with the provision of 200,000 cubic meters of drinking water per day

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Miguel Ostos

"We are convinced that this fund will represent a new boost for the development of initiatives that will result in improving the quality of life of Uruguayans, such as the Arazatí project, a Service Contract designed by OSE to contribute to the security of the supply of drinking water to the Metropolitan System and localities in the department of San José, with the provision of 200,000 cubic meters of drinking water per day," said Miguel Ostos, CAF representative in Uruguay and director of CAF-AM Uruguay.

Of the 2,000 million UI corresponding to the assigned debt investment, equivalent to approximately US$ 300 million, US$ 291 million went to the wholesale sector of institutional investors and the remaining US$ 9 million to the retail sector. The minimum total return on debt investments will be 2.25% in UI over the Sovereign Interest Rate.

The issue was rated BBBfc (uy) by FixScr and BBBf.uy by Moody's Local. The fund was registered with the Central Bank of Uruguay, will be traded on the Electronic Stock Exchange (BEVSA) and the Montevideo Stock Exchange (BVM), and will have the Corporación Nacional Financiera Administradora de Fondos de Inversión SA (CONAFIN AFISA) as trustee and paying agent.

The cost of the Arazatí project is approximately US$ 360 million (2,440 million UI). CAF will directly co-finance up to US$ 100 million, which will be added to the approximately US$ 200 million from Fund V, providing 85% of the project's needs, with the remaining 15% to be contributed by the winner's promoter consortium. The remaining US$ 100 million from Fund V will be used to finance other infrastructure projects.

"As an individual operation in the private sector, without sovereign guarantee, CAF's US$ 100 million credit to the Infraestructura Arazati S.A. consortium, made up of the companies Berkes S.A., SACEEM S.A., CIEMSA and FAST Ltda, will be the largest operation in CAF's history," said Ostos.

Created in 2014, CAF-AM and its subsidiaries have the mission of managing third-party capital funds that invest jointly with the multilateral organization in project financing transactions, mainly private infrastructure, in the countries of the region.

Until the issuance of Fund V, CAF-AM Uruguay is the main issuer in the Uruguayan securities market, with US$ 935 million outstanding among three different funds, managing 14% of the outstanding securities, followed by the Corporación Vial del Uruguay (CVU) with 13%, and UTE with 10%.

The first fund in the country was implemented in 2016 and the various funds generated total nine public-private partnership projects, financed by more than US$ 1,033 million in the country at an average of 20 years. Among the initiatives carried out with these capitals, five road circuits with 890 kilometers built stand out; the creation of 143 educational centers, such as kindergartens, CAIFs, schools, High Specialization Institutes and sports centers, as well as the Central Railway.