The Corporation’s financing strategy is to raise funds efficiently and competitively based on diversification of sources and terms, mitigation of the risks associated with interest rates and currencies, and adequate matching of asset and liability maturities. CAF seeks to have an active presence in the international capital markets, by tapping the most important markets such as the US, Europe, Japan and some regional markets.
One important consideration is to have investor diversification. CAF also maintains an active investor and intermediary contact and always welcomes innovative ideas.
Most of the funds currently raised come from international capital markets. CAF also accepts deposits from central banks and commercial banks in the region and obtains loans and credit lines from international commercial banks, official institutions and, --as long as they are related to projects financed by CAF-- export credit agencies.
How does CAF use the funds raised in the financial markets?
CAF’s objective is to promote the sustainable development and regional integration of its shareholder countries.
As a financial intermediary, CAF attracts funds into Latin America from industrialized countries to promote investments and business opportunities in the region.
With these funds, CAF focuses its action strategy on the socioeconomic development of its shareholder countries by financing operations to improve the competitiveness of their economic sectors, developing their social and economic infrastructure, supporting the physical and border integration of the region, promoting small and microenterprises, strengthening national and regional financial markets, developing human capital, and promoting state reform and modernization.
In all its actions, CAF takes into account social and environmental factors to guarantee the sustainable use of natural resources.
CAF provides multiple financial services with high added value to both public and private sectors in the form of loans, guarantees and sureties, financial advisory services and investment banking, treasury services, equity interest, and technical cooperation, among others (for more information, go to Products and Services).
CAF has benchmark-reference issues, as well as smaller size issues targeted to specific institutional demand or local markets within its region. In general, CAF places commercial papers and bonds. Commercial papers and bonds are usually directed to institutional investors.
Currently, CAF has the following issue programs: Commercial Paper and Short-Term Notes Programs
USD 2.0 billion USCP
USD 2.0 billion ECP (multi currency)
Long-term issue programs or registrations
USD 4.0 billion EMTN in Europe
USD 2.0 billion in the U.S.A
JPY 100 billion in Japan
COP 1 billion in Colombia
Limited amount registration in MXN in Mexico
In which currencies and at what volume and maturities are CAF’s securities offered?
CAF issues are usually in USD, EUR, JPY and CHF although it also has issued in regional markets in local currencies such as COP, MXN, PEN, and VEF.
In any case, according to CAF’s internal polices, all bond issues in currencies different from USD are fully hedged either through swaps or with an asset in the corresponding currency.The volume of bond issues mainly vary from USD 30 million to USD 1.0 billion, as smaller amounts are tailor made issues for institutional investors, while larger amounts are reference issues in USD, EUR, and JPY. Bond maturities usually range from 3 to 10 years, although 20-year issues have been placed to accommodate specific investor requirements. Commercial paper and other short-term instruments are offered with maturities from 1 to 364 days.
How much does CAF borrow from the international capital markets?