CAF upsizes dollar bond sale

CAF upsizes dollar bond sale

Bonds Debt Capital Markets Corporate & Sovereign Strategy Fixed Income Latin America

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Latin American development bank CAF said it sold $750 million worth of five-year bonds on Tuesday, increasing the size of the deal after receiving strong demand for the paper.

"The initial issue size today during the European morning was $500 million. However, as the order-book grew throughout the day to a total size of $1.05 billion with over 90 individual orders, we decided to increase the issue size to $750 million," Manuel Valdez, head of debt capital markets funding and derivatives at CAF, told LatinFinance. "We are very pleased with the outcome of this transaction and having a new reference point in our US dollar curve."

CAF priced the new 1.625% 2025 notes at 99.772, to yield 135 basis points over mid-swaps or 141 basis points over US Treasuries.

With Citi, Daiwa, GSI and Nomura at the lead, the development bank opened the initial price talk in the 135 basis points over mid-swaps area before launching at that level.

In August, CAF printed CHF350 million ($383 million) worth of green bonds in the Swiss market, and in July it sold ¥17.2 billion ($160 million) worth of five-year Samurai bonds among Japanese retail investors.

In May it sold its first social bonds, a total of €700 million ($771 million) worth, to finance coronavirus-related healthcare spending and emergency economic support to its member countries, and another $800 million for countercyclical response in Latin America. In March, CAF's board had approved a $2.5 billion credit line to fight the coronavirus pandemic.