CAF Looks to Niche Markets

Andean development bank CAF is preparing to finish up its borrowing for the year with possible domestic currency taps in Peru, Uruguay and Venezuela. “We have a mandate to issue in the local markets,” CAF CFO Hugo Sarmiento tells LatinFinance. He adds that CAF met most of its needs with a $1bn 8.125% of 2019 dollar bond issue in late May. “Obviously these are not large markets, but there are arbitrage opportunities after swapping into dollars,” says Sarmiento, without giving specific expected sizes for each. Regarding quasi-sovereign issuance, Sarmiento explains it is not as easy to do this in Venezuela as it is in other markets, but he says the bank is having a “very good dialogue” with the government. Dealing with Peru and Uruguay is a more straightforward process, he adds. He expects to have issued in at least two of the three local markets by the end of the year. He says CAF expects 18% loan growth in 2009, up from previous expectations of 8%. CAF delegates were in Beijing attending LatinFinance’s Latin America China Investors Forum last week.