Successful CAF US$250 million issue

(Caracas, September 06, 2006). - Yesterday, the Corporación Andina de Fomento (CAF) floated an issue on the U.S. market. Initially it was planned to issue US$200 million, however as demand was strong, twice that anticipated, the final amount came to US$250 million. The issue, with maturity in 2017, offered a highly competitive rate similar to the rate on CAF bonds, currently quoted on the secondary market and with maturity in 2015.

CAF’s Executive President, Enrique García, stated that this “issue is due to the CAF’s permanent presence in the most demanding international scenarios. In fact, the Corporation issued more than US$1.2 billion on the international bond markets in 2004 and 2005.” He also pointed out that the issue was taken up by investors from many different parts of the world, from the United States, Europe, Asia, and Latin America. The lead bank was Crédit Suisse and the co-managers were Citigroup, HSBC, Merrill Lynch, and Morgan Stanley.

In addition, in June this year, the CAF floated an issue of securities to the value of 215 billion bolivars (equivalent to US$100 million) on the Venezuelan market, so making the CAF the first multilateral agency to issue in that country since 1976; it also issued bonds to the value of 248 million new soles (approximately US$75 million) in Peru at the end of May.

The purpose of the CAF bond issues on international markets is to obtain funds to finance major projects, in line with CAF’s mission of supporting integration and the expansion of production in the public and private sectors of its member countries.

Lastly, García made a point of the fact that the Corporation’s financial strategy has been based on reducing costs and diversifying and broadening fund-raising sources on international financial markets, and that, today, it is acknowledged as one of the most competitive Latin American issuers in terms of rates and time to maturity obtained on its issues, having made 51 bond issues to date.

The CAF has been granted ratings by the four most prestigious risk-rating agencies: Moody’s Investor Service (A1), Standard & Poor’s (A), Fitch Ratings (A+), and JCR (AA-). The agencies comment that they have taken into account the sustained growth in the institution’s capitalization and its continuous profitability and efficient financial performance, as well as the immunities and privileges it enjoys thanks to its legal structure as an international entity.