International agencies confirm investment rates granted to CAF

(Caracas, December 15, 1994).-- In view of the "historic and sustained backing of its shareholders and the consistency of its operating results," the Standard & Poor's risk rating agency confirmed the investment grade previously granted to CAF, in their publication Creditweek International.

"The rating reflects the importance of the credits and sovereign risk inherent in CAF activities." According to these criteria, S&P confirm the BBB rating with the projection of “stable.”

Also, based on "strong capitalization and the backing of its members, repayment record, and its steady net income," along with "the quality of its assets which have been historically very high," the Moody’s agency maintained the Baa3 rating for the Corporation’s long-term obligations.

CAF - financial institution formed by Bolivia, Colombia, Ecuador, Peru, Venezuela - ended 1994 with a record figure of US$2.15 billion for approvals. With assets over US$2 billion, the Corporation’s shareholders also include Mexico, Chile, Trinidad and Tobago and 22 private banks from the Andean region.

In 1993, the Corporation was recognized as the leading Latin American issuer and simultaneously received three investment grades from the international risk-rating agencies, Standard & Poor's, Moody’s and IBCA.

Along with its US counterparts, the British IBCA agency, in its latest bulletin issued a few days ago, confirmed the "A-" investment-grade for long-term obligations issued by CAF. "Its liquidity is high, and it holds a significant amount of deposits in international banks, equivalent to 30% of the loans approved and disbursed. Exchange and interest risks are minimized as part of its fund generating policy, which aims for a balance with financing activities at all times," the report said.

As of June 1994 -- the bulletin added -- the capital to risk assets ratio was 41 which, combined with US$912 million guarantee capital, and the planned annual capital increases, back the shareholders’ commitment to the institution. For these reasons, IBCA said, we maintain our rating.

Thanks to the rating granted by international risk agencies, in the last 12 months CAF successfully placed over US$500 million in bonds to generate funds at very competitive rates. The most notable were the bond issue on the Samurai market of Japan and Dragon market of Southeast Asia, together with placement of commercial paper on the US market (USCP). These placements, and confirmation of the investment grades, position the Corporation as the most successful Latin American issuer.