Record bond issue placed on U.S. market

The Andean Development Corporation (CAF) today made a record bond issue, placing US$350 million at ten years on the U.S. market. This successful and timely operation -- the largest by the CAF since the start of its program of international issues in 1993 -- was led by Credit Suisse First Boston, with coleaders Goldman Sachs, Leman Brothers and Merrill Lynch.

The CAF executive president, Enrique García, said the issue confirms the long-term strategy that the multinational lender has designed to maintain a permanent presence on the most important international financial markets. Despite high demand in the market, the CAF limited its issue to US$350 million, an amount in line with its financing plans.

The issue was made in the framework of the institution’s objective of providing finance for infrastructure and integration projects in the shareholder countries to make a practical contribution to improving the region’s development and competitiveness indexes.

A very important factor in the success of this new issue is the strength of the issuer as reflected in its risk ratings - the highest in Latin America - which are a prime attraction for international investors. The CAF holds an “A” rating from Standard and Poor's and Fitch, and an “A2” rating from Moody's.

Following its conservative financial policies, the issue was converted at a floating rate through a swap operation with ABN Amro.

With a financial strategy based on diversification and expansion of sources of funds and on reducing costs on international financial markets, the Andean development bank is now recognized as the most competitive Latin American issuer in relation to the rates and terms obtained on its placements. Through its permanent presence on the most demanding world markets, the CAF has accumulated over US$7 billion in funds since 1993 including the current issue.