CAF—Development Bank of Latin America—has once again demonstrated its robust presence in the European financial market with a highly successful bond issuance. The institution successfully placed a EUR 400 million bond, equivalent to approximately $400 million USD into EUR at the time of issue, highlighting strong investor confidence and CAF’s sound financial standing. This placement, which matures in March 2018 and carries a 4.625% yield, significantly exceeded initial expectations, underscoring the appeal of CAF’s debt in international markets.
The initial target for the issuance was EUR 300 million, but overwhelming demand, registering three times the intended amount, allowed CAF to increase the placement to EUR 400 million. This exceptional level of interest not only reflects investors’ positive perception of CAF but also enabled the institution to secure pricing at the most favorable end of the marketed range. Such robust demand in a competitive market environment speaks volumes about CAF’s credibility and the attractiveness of its investment proposition.
A diverse group of 80 investors, spanning 13 countries across Europe and the Middle East, participated in this significant financial operation. The investor base was primarily composed of key financial players, including fund managers, insurance companies, pension funds, and banks, mainly from financial hubs such as Germany, France, Great Britain, Netherlands, and Switzerland. The transaction was expertly managed by leading financial institutions HSBC and BNP Paribas, further ensuring the success and smooth execution of this bond issue.
Enrique García, CAF Executive President, emphasized that this successful placement reinforces CAF’s active and respected position within the most prestigious international financial markets. He noted that since 1993, CAF has raised approximately USD 12.5 billion through various issuances, consistently playing a crucial catalytic role in channeling funds from industrialized nations towards Latin America. These funds are instrumental in fostering vital investments and creating commercial opportunities across the region, thereby supporting sustainable development and economic growth.
Furthermore, Mr. García highlighted CAF’s consistent presence in global capital markets, which has enabled the institution to issue close to USD 2 billion in the current year alone. This consistent access to international funding is a testament to CAF’s strong reputation and the trust it has cultivated among global investors.
Concluding his remarks, García pointed out that CAF’s high credit ratings are fundamental to its continued success in international markets. “Without CAF’s high credit ratings,” he stated, “this successful presence in the markets would not be possible. Once again, our financial soundness is confirmed by the success obtained with this new issue.” Notably, this successful placement was achieved despite the backdrop of volatility in capital markets triggered by the financial challenges in Ireland, further highlighting CAF’s resilience and investor appeal even during periods of global financial uncertainty.
CAF’s consistently high credit ratings are among the highest in the region for debt issuers. These ratings are a direct result of CAF’s strong financial indicators, its robust legal framework, and the unwavering commitment from its shareholder countries. These factors collectively contribute to CAF’s reputation as a reliable and trustworthy institution in the international financial landscape, making its bonds a sought-after investment for global investors looking to support development in Latin America.
