Record US$500-million issue placed on U.S. market

The Andean Development Corporation (CAF) placed a record issue of US$500 million on the U.S. market, the largest by this multilateral financial institution so far. The operation has a 10-year term with a 5.20% coupon – equivalent to 1.68% over U.S. Treasury Bills. Merrill Lynch was lead bank of a syndicate formed by Citigroup, Credit Suisse First Boston, Deutsche Bank and Goldman Sachs.

CAF Executive President Enrique García said that this bond issue was launched on the market with an initial amount of US$300 million. However, the interest shown by investors, both in the United States and Europe, resulted in orders over US$2.40 billion – eight times more than the original amount – representing a record level of applications for CAF bonds. In view of this strong demand, it was decided to increase the issue to US$500 million to cover over 100 institutional investors. García added that “the success of the issue shows that the markets have great confidence in the CAF, based on its financial soundness and important catalytic role in Latin America.”

In a statement from New York, Merrill Lynch Director Augusto Urmeneta emphasized the great interest shown by investors, particularly specialists in high-quality bonds, which recognize CAF’s prestige. For Merrill Lynch it has been an honor to participate in this issue as lead bank. The CAF is an important issuer that “brings us closer to the investors that follow it with great interest,” he added.

The multilateral lender has become one of the most prestigious issuers on U.S., Japanese, European and Latin American markets at long and short term. With this new issue, the CAF has raised a total of $884 million on bond markets this year, through issues in the United States, Europe and the Condor Bond distributed in the Andean Region.