Assigned by Standard & Poor's

(Caracas, December 22, 2000).- The international rating agency Standard & Poor's today assigned the sovereign "Triple B" investment-grade rating to a syndicated loan for US$250 million for five years granted to the Republic of Colombia, which has a Rolling Partial Credit Guarantee from CAF for US$100 million.

CAF President & CEO Enrique García said, "the fact that this transaction is accompanied by a Partial Credit Guarantee issued by CAF was decisive in the agency’s rating decision". He added, "this new recognition by Standard & Poor's is vital because it has improved Colombia’s credit rating by raising its sovereign risk rating to investment grade category.

García said the Partial Credit Guarantee was a new CAF financial instrument which gives its shareholder countries the opportunity to optimize use of their funds, while helping to maximize the Corporation’s catalytic potential. "The effectiveness of this mechanism can be seen in Colombia’s case because, thanks to this guarantee, the country can access financial markets under more favorable conditions."

The guarantee initially covers the first US$100 million in payments for debt service; as each payment is made by Colombia, the guarantee "rolls over" covering the next US$100 million in payments and so on until full repayment of the loan. Over time the rolling guarantee mechanism means that, at any given time, the rating of future payments of interest and principal on the loan will be equal to the CAF (A) rating.

As a direct outcome of Colombia's increased participation on international financial markets, the group of potential creditors will expand bringing in, in addition to those interested in emerging markets, agents that invest in debt and capital markets with investment grade assigned by the risk rating agencies.