CAF grants US$250 million loan to Colombian company Bavaria

In one of the largest joint financing operations of recent years, the Andean Development Corporation (CAF) granted on August 14 an A/B loan for US$250 million to the Colombian company Bavaria S.A. to finance investment programs by the company and its subsidiaries.

The president of CAF, Enrique García, said the operation shows once again the success of the Corporation’s catalytic effort to attract external resources for channeling into its shareholder countries, especially their private sectors.

With Japanese financial institutions participating for the first time, García said that an important group of banks led by JP Morgan had taken 75% of the portion B of the credit, while the CAF was contributing the remaining 25%.

García added that CAF has approved A/B loans for US$460 million for Colombia, including the current operation, achieving co-financing structures with prestigious international financial institutions.

This loan shows the degree of strength and confidence generated by the CAF among international investors in times of financial strains in Latin America provoked by the difficult situation in Argentina.

The transaction was very well received by the syndicated loan market, as shown by the participation of 15 banks from Japan, Europe, the United States and Latin America, and the high level of over-subscription. The operation also marked the return of Colombian companies to the market which had been significantly limited for that country since 1999.

A first-rate combination Susan de la Puente, JP Morgan director for the Andean region, Central America and the Caribbean, said the transaction had had a notable success in the international syndicated loans market.

She said that international banks had heavily oversubscribed the loan for much more than the US$187.5 million required for portion B.

De la Puente said JP Morgan was very pleased to have successfully arranged a combination that offers the market the financial strength of Bavaria with the multilateral backing of the CAF.