CAF Goes for Yen Financing

CAF, the Caracas-based Andean development bank, tapped the Japanese bond market for a combined $245m worth of local currency bonds Thursday. The bank issued JPY20bn in 2010 notes at Yen Libor plus 22bp, to yield 1.67%, and JPY10bn in 2014 notes at Yen Libor+37bp to yield 2.32%. Pricing came at the tight end of guidance of 22bp-26bp and 36bp-40bp respectively. The bonds are rated A+/A+/A1 and proceeds were immediately swapped into dollars. “The spread was actually in line with our USD curve so we don’t have to pay any additional [cash] after the swap,” Gabriel Felpeto, CAF’s director of financial policy, tells LatinFinance. This is CAF’s sixth issue in Japan, the last of which came in 2005. The development bank’s financing needs for 2007 are between $800m and $1bn and so far, it has raised $600m, says Felpeto, leaving up to $400m more in potential issuance through the end of the year. The Samurai was aimed at diversification of the investor base.