CABEI recruits bookrunners for next bond sale

CABEI recruits bookrunners for next bond sale

Bonds Debt Capital Markets Fixed Income Corporate & Sovereign Strategy Coronavirus Loans Central America Guatemala El Salvador Honduras Nicaragua Costa Rica Panama Dominican Republic Belize

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The Central American Bank for Economic Integration (CABEI) has hired three banks to lead the sale of $500 million worth of three- to five-year bonds, a source involved in the deal told LatinFinance on Tuesday.

The bookrunners – Citi, Crédit Agricole and HSBC – will hold calls with investors on Wednesday, the source said without giving a date for a likely transaction.

On Monday, the bank announced that it had increased its capital by $2 billion to $7 billion with pledges of at least $255 million from each of its founding members countries. CABEI's founders are Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica.

The 40% increase in capital will raise the bank's lending capacity by roughly 45%, or approximately $1 billion, to more than $3 billion a year, CABEI said in a press release.

CABEI launched an emergency financing line for $1.96 billion earlier this month to deal with the coronavirus pandemic, including $600 million in emergency loans to member nations, $1 billion for central banks in the region and $350 million to strengthen the financial system in Central America.

CABEI CFO Hernán Alvarado said in October last year that the development bank planned to sell $500 million worth of dollar-denominated bonds in the first half of 2020.

In March this year, CABEI issued MXN6 billion ($246 million) in floating-rate notes in Mexico, while in February it got a €31 million ($33.7 million) loan from the German development bank KfW.

In its last cross-border bond deal in November last year, CABEI priced $375 million worth of five-year green bonds at 85 basis points over Libor. After that, it got signed a €180 million credit line from the French development agency AFD in December.

Moody's gives CABEI an Aa3 rating, while S&P Global and Japan Credit Rating assign it a AA.