Successful placement of 350 million euros

The Andean Development Corporation (CAF) today placed its first issue of seven-year bonds valued at 350 million euros on the European market at a rate of 144 basis points over the reference bonds of the German government. The operation, originally planned for 300 million euros, was increased due to strong demand. The successful and well-timed issue, led by the Dresden Bank and Merrill Lynch, was widely subscribed by institutional capital and new investors to the CAF.

According to the CAF executive president, Enrique Garcia, "the success of this new issue confirms once again the Corporation’s financial strength. Given its size, a significant number of new CAF investors took part in the placement." At present Latin American paper has little appeal on the European market; however the multinational lender’s high ratings have made today’s placement very attractive and gained highly competitive conditions for the issue. The CAF has ratings of "A" from Standard and Poor's, "A" from Fitch and "A2" from Moody's.

"This operation confirms the long-term strategy we have designed for the institution, which is to maintain a permanent presence on the most important international financial markets," Garcia added.

The seven-year bonds will finance major infrastructure and integration projects in the member countries in line with the mission of the multilateral financial organization.

The Corporation’s financial strategy is based on diversification and broadening of sources of funds and reducing costs on international financial markets. CAF is now recognized as the most competitive Latin-American issuer with respect to the rates and terms obtained for its placements.

In its last issue in March, the CAF placed US$350 million at ten years on the U.S. market.