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Credit Where Credit Is Due

Sep 1, 2005

CAF stands to wow investors with improving financial results, its first Samurai bond issue in four years and now Italy seeking to become a member.

by Maria O'Brien
Hugo Sarmiento

The Andean Development Corp. (CAF) is an anomaly. It is an investment-grade rated public-sector development bank whose principal owners are some of the most unstable countries in Latin America. CAF is controlled by the governments of Bolivia, Colombia, Ecuador, Peru and Venezuela. And yet CAF has won a reputation for strong management and innovation.

CAF underscored its status as Latin America's highest-rated issuer in June, when it became the first Latin American issuer to sell bonds in Japan since Argentina's economic crisis in 2001. The issue was a three- and seven-year, two-tranche bond for ¥20 billion ($180 million) priced to yield 0.58% and 1.31% respectively. "We hope that this will open the way for other issuers in the region," Hugo Sarmiento, CAF's chief financial officer, said...

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