Most competitive placement by a Latin American issuer on Yankee market

Continuing its successive and successful operations on international markets, CAF today placed an issue of long-term bonds for US$200 million on the US domestic market, which was the most competitive Yankee bond achieved by any Latin American issuer.

The placement, in New York, was led by Merrill Lynch & Co, with co-participation of Goldman Sachs & Co and Credit Suisse-First Boston. The issue’s success was due to the BAA2 and BBB+ investment-grade ratings assigned by Moody's and Standard & Poor's, respectively, for long-term debt.

CAF President & CEO Enrique García, of Bolivian nationality, said the rates and terms obtained by this issue were the most competitive obtained by a Latin American issuer and even better than some US corporations with similar investment grade.

Including the present issue, CAF has placed paper for a total of US$1.636 million on the world’s most demanding markets in Europe, Japan, United States and Southeast Asia.

CAF – international financial institution with headquarters in Caracas – is formed by ten countries of the region. Five of them members of the Andean Community, while the rest – Brazil, Chile, Mexico, Paraguay and Trinidad and Tobago – belong to other regional integration schemes such as Mercosur, Caricom, FTA and G-3. This wide range of members reinforces one of the CAF objectives which is to act as a bridge between all these groups and facilitate access to international capital markets.

Details of the issue "Of the total of US$200 million of this issue – García said – a US$150 million tranche was placed at ten years, 76 points above the US Treasury rate, while the remaining US$50 million was at 20 years, 91 points above the Treasury rate."

He added that the funds "would mainly be used to finance infrastructure projects in the shareholder countries – roads, transport, energy and telecommunications – sectors considered as strategic for achieving sustainable development, improving competitiveness and contributing to regional integration."

This is the third CAF issue on the US domestic market, considered one of the largest and most demanding markets in the world given its annual volume.

The first placement was made in July 1995 for US$250 million at five years, a special achievement because it was the first Latin American issue after the Mexican crisis. The second was placed in January 1996 for US$200 million at seven years; previously in 1995 CAF had been awarded the “Best Latin American Issuer” prize by Euromoney.