CAF—Development Bank of Latin America—has reinforced its strong standing in the European financial market with a highly successful EUR 400 million bond issuance, equivalent to USD 540 million. The bond, set to mature in March 2018, carries an attractive interest rate of 4.625%. This issuance witnessed remarkable investor demand, reaching three times the initially planned EUR 300 million. This overwhelming interest allowed CAF to increase the total amount raised and secure pricing at the most favorable end of the marketed range.
High Investor Demand Reflects Confidence in CAF
The bond attracted broad participation from 80 distinct investors representing 13 countries across Europe and the Middle East. Notably, significant investment came from key financial hubs including Germany, France, Great Britain, Netherlands, and Switzerland. The investor base comprised primarily of fund managers, insurance corporations, pension funds, and major banks, highlighting the diverse appeal of CAF’s offering within sophisticated financial circles. Leading international banks HSBC and BNP Paribas played key roles in managing this successful issuance.
Strategic Market Presence and Latin American Investment
CAF Executive President Enrique García emphasized the significance of this achievement, stating that the placement clearly reflects CAF’s proactive and consistent presence in the world’s most prestigious international markets. He highlighted CAF’s long-term track record, noting that since 1993, the institution has successfully issued bonds totaling approximately USD 12.5 billion. This consistent market engagement underscores CAF’s crucial role in channeling funds from developed economies towards Latin America, thereby stimulating vital investments and fostering commercial opportunities throughout the region. President García further added that CAF’s sustained activity in global capital markets has enabled them to mobilize close to USD 2 billion in funding within the current year alone.
Financial Soundness Underpins Market Success
Concluding his remarks, García pointed out that CAF’s robust financial health is the cornerstone of its market success. “Without CAF’s high credit ratings, 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.” The successful placement of this EUR 400 million to USD equivalent bond is particularly noteworthy as it was achieved amidst a period of volatility in capital markets triggered by the financial challenges in Ireland. CAF’s high credit ratings, among the strongest in the Latin American region, are a testament to its excellent financial performance, robust legal framework, and the unwavering commitment from its shareholder nations.
