First bond issue in Colombian pesos

Bond issue launched in Colombian pesos

The Andean Development Corporation (CAF) today launched a bond issue in Colombian currency for 272,220 million pesos (about $100 million) maturing on October 29, 2010. The interest rate is linked to the Colombian consumer price index (CPI). Demand totaled 534,758 million pesos which was double the amount of the offering. All Colombian institutional investors were represented in the distribution with a share of 66%, followed by the banks with 26% and stockbroker firms with the remaining 8%.

CAF Executive President Enrique García said it was the first bond issue that the multilateral financial institution had made in the local currency of a member country. With this placement, the institution is diversifying its financial markets. As part of this strategy, the CAF had previously issued its first “Condor” bond for institutional investors in the Andean region. García emphasized the broad support received from government and financial authorities, and from Colombian investors.

ABN AMRO Vice President José David Ortiz commented that the bond issue in Colombian pesos is an important transaction for this market because it shows the level of development achieved in terms of depth, breadth and liquidity. The placement also reflects progress in the process of institutionalizing savings in Colombia achieved through important regulatory changes that have expanded the investor base, increasing the efficiency of investment vehicles and improving investor confidence. The bonds will help develop the market offering investors an alternative for diversification.

The CAF will use the funds from the sale of these bonds for general operations, including important transactions in Colombia to promote the sustainable economic development of the Andean region.

The structuring agents of the issue are ABN AMRO Bank NV and Corfivalle, accompanied by the Colombian financial intermediaries Corfivalle as lead placement agent and Alianza Valores.