Return to the euromarket

Continuing its financial strategy of developing a broad investor base in Europe, CAF today placed a US$150 million bond issue on the euromarket, the second on this market this year.

The issue – at five years – was launched in London and led by Deutsche Morgan Grenfell and Merrill Lynch & Co, with coparticipation by the banks ABN Amro, BNP, Credit Suisse First Boston, Credito Italiano, Dresdner Kleinwort Benson, Goldman Sachs, Lehman Brothers, Rhineland Pflaz, Santander, Societé Generale, and West LB.

The success of the issue was considerably helped by the A3, A- and BBB+ investment-grade ratings assigned to CAF by Moody’s, IBCA and Standard & Poor's, respectively, for its long-term debt.

CAF President & CEO Enrique García – of Bolivian nationality – said the issue was in response to a strategy of diversification aimed at maintaining a continuous presence on the old continent with a view to the launch of the European Monetary Union, recently agreed for January 1, 1999.

He added that, including the latest one, CAF had made five issues on this market – for a total of US$580 million – one of them in German marks (January 1998), which demonstrates "the institution’s versatility in issuing bonds flexibly and rapidly in any currency."

CAF made its first public bond issue in 1993, precisely on the euro markets. During these five years it has generated funds at very competitive rates and terms for a Latin American issuer, "which we have channeled on very attractive conditions into our shareholder countries, and promoted the region as a serious and reliable partner for investors which operate on the leading international financial markets," the CAF Chief added.

Lastly, García said that so far CAF had made placements totaling over US$2 billion, including markets as demanding as the Samurai (Japan), Dragon (Southeast Asia), and Yankee (USA).

These funds are used to finance projects considered priority for contributing to the sustainable development of shareholder countries, raising competitiveness and facilitating regional integration.

CAF – international financial institution with headquarters in Caracas – is formed by 12 countries of Latin America and the Caribbean. Five of them are members of the Andean Community: Bolivia, Colombia, Ecuador, Peru and Venezuela, while the rest – Brazil, Chile, Jamaica, Mexico, Panama, Paraguay and Trinidad and Tobago – are members of other regional integration schemes such as Mercosur, Caricom, FTA and G-3, which reinforces one of the objectives of the Corporation which is to act as a bridge between them and facilitate their access to international capital markets.

Placement of paper on international financial markets (as of January 31, 1998)