CAF places US $ 1 billion in bonds to boost the reactivation of Latin America

The Development Bank of Latin America (CAF) announced the placement of bonds for US $ 1 billion to promote the social and economic reactivation of Latin America. This issue has a maturity of 3 years and a coupon of 1.25%.

“Today more than ever, Latin America and the Caribbean needs us and here we are, attracting new resources at favorable rates to continue supporting governments in their care plans, mitigation of the pandemic and in the social and economic reactivation, which we have set as priority in the first 100 days of management, ”said Sergio Díaz-Granados, executive president of CAF.

This issuance in the US market stands out due to the favorable price level achieved for CAF, thanks to the interest of investors, mainly fund managers, public institutions, pension funds, central banks, commercial banks with a geographical distribution in Europe, Middle East, Africa, Asia and America. The placing banks were Barclays, BNP, Daiwa, JP Morgan.

“The first benchmark-size CAF issuance in 2021 was a success. By cleverly utilizing currency diversification with the euro issuance at the beginning of the year, the CAF team has created exceptional value for dollar buyers and has managed to exceed its size target with a minimal concession. The high quality of demand, the highest since 2016, confirms the continued support that CAF receives from investors, ”said Lee Cumbes, director of DCM at Barclays.

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“I congratulate CAF’s finance team for successfully navigating the recent macro volatility and, at the same time, achieving the largest transaction in the last three years and a marginal concession to the secondary curve,” said Jamie Stirling, Director of SSA DCM at BNP Paribas.

CAF: support for Latin America

CAF supports the region in an agile and timely manner through a series of financial and technical instruments that complement the measures that governments are applying. The comprehensive strategy includes fast-disbursing counter-cyclical emergency financing for US $ 4.1 billion, and a Regional Contingent Credit Line for epidemics for US $ 300 million for direct care of public health systems.

It also includes non-reimbursable technical cooperation resources for US $ 5 million for priority initiatives related to responding to the pandemic; a Financial Credit Line for US $ 1,600 million for national development banks; and two liquidity facilities to support the health systems and public service companies of the shareholder countries, for an aggregate amount of US $ 1.7 billion.

The data

In 2021, CAF has issued close to US $ 4.5 billion in various markets. In this period, a benchmark-size public operation was carried out, a record in the European market. Different transactions have also been carried out in the Asian and Mexican markets and the first SOFR (Secured Overnight Financing Rate) bond carried out by a Latin American issuer.