JCR assigns CAF best risk rating in Latin America

The Japanese Credit Rating Agency (JCR) today recognized the strength and financial stability of the Andean Development Corporation (CAF) assigning an AA- risk rating (double A minus) to its long-term debt.

CAF President & CEO Enrique García said that this decision - announced by JCR in Tokyo, Japan - confirms the institution as the most frequent Latin American issuer with the best risk rating based on the strength and stability of its operating results, prudent credit management policies, and the political independence of its actions, thanks to the support received from its shareholders.

García said that the rating assigned by JCR was recognition and backing for the Corporation’s financial management, "and will help to obtain more funds for investment in favor of the 17 shareholder countries." In 2004 the multilateral institution approved over US$3.50 billion in loans for the region.

JCR said the decision to assign the rating was based on the support of CAF shareholders throughout the Corporation's history, support demonstrated by punctual payment of their obligations, and continuous capital contributions. The agency emphasized that in crisis periods in Latin America, and at times of uncertainty in individual countries, the shareholders have always made their payments, never defaulting on their financial obligations to the regional institution.

JCR explained that the sustained growth of the Corporation's profits, its continuing profitability and efficient financial performance were taken into account for the rating, along with the immunities and privileged privileges conferred by its international legal status, reflecting CAF’s importance as one of the main providers to the economies of its member countries from a solid capital base.

The Andean Development Corporation recently issued bonds on the Japanese Samurai market for 20 trillion yen, led by the Japanese investment banks Mizuho and Nomura. Placements of CAF bonds on international markets are intended to finance major projects in line with the organization’s mission which is to support the integration and productive expansion of the public and private sectors in its member countries.

The Corporation’s financial strategy is based on diversification and expansion of its sources of funds and reduction of costs on international financial markets. CAF is recognized as one of the most competitive Latin American issuers with respect to the rates and terms obtained on its placements, with 49 bond issues to date.