CAF issues GBP 1 billion bond in the UK market with record demand

CAF - development bank of Latin America and the Caribbean - successfully issued a five-year,GBP 1 billion benchmark bond maturing in January 2031, consolidating its presence in the UK capital markets and expanding its international investor base. The transaction was supported by BMO, Citibank, HSBC and Banco Santander, which acted as structuring banks.

The bond was issued with a fixed annual coupon of 4.375%, equivalent to a spread of 44.6 basis points over the UK gilt, maturing in March 2031.

The issue saw record demand for CAF in the sterling market, with the order book exceeding GBP 5.7 billion, reflecting strong investor appetite for the credit quality of the institution, which is rated Aa3 by Moody's, AA+ by S&P and AA- by Fitch. More than 100 investors participated in the transaction, with a clear predominance of asset managers and banks, which accounted for 84% of the book, and UK investors, responsible for 77% of the geographic distribution.

"This successful sterling issuance confirms the international market's confidence in CAF's financial strength and its role as the region's development bank," said Sergio Diaz-Granados, CAF's executive president. "By expanding and diversifying our sources of financing, we strengthen our ability to support projects that promote sustainable growth, regional integration and social inclusion in Latin America and the Caribbean."

The transaction reinforces CAF's commitment to maintain a recurring presence in the UK market, with this being the third sterling benchmark issue since the institution's return to that market in April 2024. The transaction was carried out in a context of high CAF activity in the international markets, following the recent placement of a USD 2 billion ten-year bond, which also registered solid demand.

With this issuance, CAF continues to strengthen its strategy of accessing international capital markets as a key instrument for mobilizing long-term resources for financing sustainable infrastructure, climate action, social development and regional integration in its shareholder countries.