CAF launches its first Hybrid Capital issuance for USD 500 million

CAF -development bank of Latin America and the Caribbean- announced today the successful placement of its first hybrid capital notes issuance for USD 500 million, becoming the first multilateral financial institution in Latin America to incorporate hybrid capital into its financing strategy. This instrument significantly expands CAF's lending capacity, as it is recognized as 100% equity by major rating agencies, resulting in additional lending capacity of up to approximately four times the amount issued.

The issuance was structured as a perpetual bond in US dollars, with a call option at 5.5 years and subsequently every 5 years. It offers a fixed annual coupon of 6.75% until December 2030, with adjustments every five years thereafter. Barclays, BNP Paribas, Goldman Sachs and HSBC acted as placement agents, and BNP Paribas and HSBC as joint structurers.

The transaction received record demand, with an order book exceeding USD 3,200 million and the participation of more than 200 institutional investors, representing an oversubscription of more than six times the issued amount. The investor base was highly diversified and of high quality, with a majority participation from asset managers (67%), followed by hedge funds (13%), pension funds and insurers (12%), banks (4%) and central banks and official institutions (3%). Demand came mainly from accounts in Europe, Middle East and Africa (64%), followed by the Americas (31%) and Asia (5%). This strong interest reflects the market's confidence in CAF's financial strength and its regional development strategy.

"This instrument marks a milestone in our institutional evolution and confirms the support of international markets for our vision of sustainable development," highlighted Sergio Díaz-Granados, CAF's Executive President. "It allows us to strengthen our balance sheet and significantly expand support to member countries, without compromising our financial strength."

This transaction allows CAF to diversify its funding sources and optimize its capital structure. The proceeds will be allocated to strategic projects in infrastructure, social inclusion, productive transformation and environmental sustainability, contributing to economic growth and reducing development gaps in Latin America and the Caribbean.