CAF Monitors Bond Opportunity

Caracas-based multilateral CAF says it is sitting pretty for funding and in no hurry to come back to the bond market. “We’re not in a rush. We have very high liquidity and we are waiting for conditions to improve,” Gabriel Felpeto, CAF’s director of financial policies and international issues tells LatinFinance. CAF returned last week to Colombia’s local market with an oversubscribed bond issue at apparently attractive levels. It issued Tuesday COP245bn ($110m) total, split between an 11.25% of 2013 and an 11.79% of 2018. Pricing was equivalent to 65bp over TES, while other Triple As came recently at 100bp-120bp over TES and 65bp was in line with the target, he adds. “We didn’t have the need this year but we had the opportunity,” says Felpeto. The deal through BBVA was the debut from a COP1trn 3-year CAF program and the first from the multilateral since 2004. Felpeto adds that CAF is looking at tapping other local currency like Peru and Mexico, while also monitoring the USD market. CAF was hit last week with a negative outlook from S&P on its A+/A-1 rating amid concerns about exposure to Ecuador, which is in default, as well as Venezuela and Argentina. The multilateral is among the region’s highest rated borrowers and typically leads the way back for issuers when markets slam shut.