Trinidad and Tobago: new CAF shareholder partner

(Caracas, June 23, 1994).-- The agreement to formalize the subscription of Trinidad and Tobago to CAF equity will be signed tomorrow in Port of Spain. CAF is the financial organization of the Andean Group formed by Bolivia, Colombia, Ecuador, Peru and Venezuela, with two extra-regional countries which participate as partner shareholders: Mexico and Chile.

The agreement will be signed in the ministry of Finance by CAF President & CEO Enrique García, and Trinidad and Tobago Finance Minister Kenneth Valley.

In recent years, CAF has become a versatile and effective communication bridge between the Andean Group and other regional integration schemes, given the great dynamism of these processes.

With these actions, the Corporation is fulfilling one of the objectives of its mission which is to support sustainable growth and regional integration efforts. To do this it generates and channels foreign investments into Latin America and promotes the region on international financial markets where CAF has a prestigious position.

Since 1993, the Corporation has been competing on these markets, successfully placing four public bond issues on the Euromarket, in Japan and on the Dragon market (Southeast Asia), for a total of US$425 million, on very advantageous conditions. The decisive factor was the granting of three investment-grade ratings by the most important risk-rating firms of Europe and the United States (IBCA, Moody’s and Standard & Poor’s) which not only facilitated placement of the bonds but also promoted CAF at the highest world level.

To develop closer relations with other nations, CAF offers “C” series shares which are reserved for extra-subregional countries which wish to strengthen their links with the Andean area, by stimulating commercial relations, promoting foreign investments, technology transfer, business transactions, joint ventures and joint participation on international markets with the business sectors of the partner countries.

Mexico, Chile and now Trinidad and Tobago have subscribed to this type of share, and Jamaica and Brazil are expected to follow suit in the near future.

With the Caribbean area, CAF has established productive institutional and commercial contacts which have led to conclusion of joint business between Andean and Caribbean private companies.

The Corporation has also made available a series of lines of credit to finance foreign trade operation to financial institutions in Mexico, Chile, Trinidad and Tobago, St Lucia, Antigua and Barbuda, St Vincent and the Grenadines, Jamaica and Barbados. These facilities are used to finance foreign trade operations between these countries and the Andean nations.

García said CAF was contributing pragmatically to strengthening economic, financial and commercial relations in Latin America and the Caribbean, which is especially important because all the countries are committed to moving toward reciprocal free trade, harmonizing their economic policies and opening financial markets.

He added that the Corporation had signed cooperation agreements with the Caribbean Development Bank (CDB), the Central American Economic Integration Bank (BCIE), the Financial Fund for River Plate Development (FONPLATA), the Latin American Economic System (SELA), and the Latin American Integration Association (ALADI).

On the characteristics of series "C" shares, he said CAF could undertake operations with the government or government departments of the country which subscribes to this paper, such as financing projects whose objective is the integration of one or more Andean Group countries, or technical cooperation grants to finance preparation of integration projects. CAF can also offer financial assistance to public or private companies in shareholder countries, associated with Andean companies, and grant lines of credit to their banks.