CAF Eyes Euros, Local Markets

With expected funding needs of $1bn this year, Corporacion Andina de Fomento (CAF) plans to tap the dollar, euro and local LatAm markets. “We have been issuing [in euros] for years, and would like to go back to that market,” Gabriel Felpeto, the multilateral lender’s director for financial policies and international issues, tells LatinFinance. CAF’s last public euro deal was a EUR300m 5-year in 2006, according to Dealogic. Following up 2009’s JPY10bn ($109m) 10-year Samurai bond is also a possibility. Issuance in domestic markets should also continue to be important, after making up 20% of CAF’s 2009 funding. “We’re looking at all the markets,” Felpeto says, identifying Mexico, Colombia, Peru, Uruguay, Chile and Venezuela as possibilities. CAF foresees borrowing about $1bn this year, based on the loan portfolio expanding by a 9%-10% forecast. It has already raised almost $300m through smaller private placements in euros, dollars and Uruguayan pesos. The latter includes a recent $50m 2017 paying a coupon linked to a Uruguayan stock index, sold to a handful of local pension funds. CAF will also continue its commercial paper programs in euros and dollars, and is considering boosting the size of each to $1.5bn/EUR1.5bn from $1bn/EUR1bn.