Corporacion Andina de Fomento (CAF)...Corporacion Andina de Fomento (CAF) Rating A1, A, A+ Gabriel...
Transcript of Corporacion Andina de Fomento (CAF)...Corporacion Andina de Fomento (CAF) Rating A1, A, A+ Gabriel...
Supranationals - non-Europe
246 EuroWeek Financing supranationals and agencies
Corporacion Andina de Fomento (CAF)Rating A1, A, A+
Gabriel Felpeto Director (funding)
Alfonso Machado Director (treasury)
Key oFFiciAls
Corporación Andina de Fomento (CAF) is a multilateral financial institution that provides multiple banking services to public and private clients of its shareholder countries.
Established in 1970, in Caracas, Venezuela, it has country offices in Buenos Aires, La Paz, Brasilia, Bogota, Quito, Madrid, Panama and Lima. Its shareholders are: Argentina, Brazil, Bolivia, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Jamaica, México, Panama, Paraguay, Peru, Spain, Trinidad & Tobago, Uruguay, Venezuela, and 14 private banks in the region.
overview
*Forecast. Source: CAF
$ bn
0
0.5
1
1.5
2
2.5
2006
2005
2007
2008
2009
2010
2011
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Bond issuAnce
Source: CAF
$bn
Bonds1.99
Long term loans 0.26
Commercial Papers3.953
issuAnce By type (2010)
Source: CAF
Asset management
55%
Bank 7%
Insurance 16%
Hedge fund 14%
Other 8%
investor BAse By type (2010)
Source: CAF
US 55% Europe
26%
Latin America 11%
Asia 8%
investor BAse By reGion (2010)
Data at December 31, 2010. Source: CAF
USD 63%
EUR 15%
JPY 6%
COP 3% VEB
3%
CHF 7%
MXN 1%
PEN 2%
outstAndinG issuAnce By currency
Data at December 31, 2010. Source: CAF
$ m
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200
400
600
800
1,000
1,200
1,400
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2012
2013
2014
2015
2016
2017
2018
2019
>2019
Bond MAturity proFile
Data at December 31, 2010. Source: CAF
Colombia20.7%
Peru20.7%
Venezuela20.7%
Argentina7.9%
Brazil7.1%
Ecuador5.9%
Bolivia5.8%
Spain3.2%
Uruguay2.4%
Panama1.6%
Otros 4.0%
shAreholders
Supranationals - non-Europe
Financing supranationals and agencies EuroWeek 247
Minimum size: $50m
structure: mainly plain vanilla
currency: various
privAte plAceMent policy
Data at December 31, 2010. Source: CAF
Manufacturing industry 1.5%
Electricity, gas & water 29.7%
Transport & communication
31.7%
Financial intermediaries
14.2%
Social & other infrastructure programmes
22.3% Other activities
0.8%
loAns By sectorBonds: $1.5bnlong-term loans: $500m
FundinG proGrAMMe 2011
risk weighting: 20% / 50%Guarantee: none
risK weiGhtinG / GuArAntee rank lead Manager Amount $m no of issues
% share
1 HSBC 738 3 34.79
2 Credit Suisse 693 3 32.68
3 BNP Paribas 440 2 20.73
4 Nomura 88 1 4.16
4 Mizuho 88 1 4.16
6Daiwa Capital Markets
74 1 3.49
subtotal 2,122 7 100
total 2,122 7 100
Source: Dealogic (March 16, 2010 to March 15, 2011)
top BooKrunners
pricing date January 26, 2011
value Eu250m
Maturity date March 29, 2018
coupon 4.625%
spread to swaps 175bp
Bookrunners HSBC, BNP Paribas
pricing date November 22, 2010
value Eu400m
Maturity date March 29, 2018
coupon 4.625%
spread to swaps 200bp
Bookrunners HSBC, BNP Paribas
pricing date July 7, 2010
value $600m
Maturity date January 15, 2016
coupon 3.75%
spread to benchmark 210bp over USTs
Bookrunners Credit Suisse, HSBCc
Source: Dealogic
recent deAls
standard & poor’s
A+, positive outlook
strengths•Unsurpassedshareholdersupport,intermsof
both historical preferred creditor treatment and ongoing capital contributions
•LowriskembeddedinCAF’sloans,equityinvestments, and guarantees (development-related exposure) compared with that of regional commercial institutions
weaknesses•Despiterecentincreases,theratioofreserves
forlossesplusshareholders’equity(narrowrisk-bearingcapacity)toloans,equityinvestments,and guarantees and to embedded credit risk is somewhat weaker than at more highly rated multilateral development finance institutions
•Althoughgraduallydeclining,thegeographicconcentrationinCAF’sloanportfolioremainsrelatively high
ThepositiveoutlookreflectsCAF’ssuccessinexpandingits membership base, increasing its paid-in capital, and reducing the country concentration in its loan portfolio.AsCAF’smembershipcontinuestoexpand,thecorporation is evolving into a regional lending institution, versus a sub-regional institution. S&P could raise the ratings on CAF given continued expansion of its non-borrowing membership base and diversification of its loan portfolio, assuming no deterioration in its financial profile or shortening of the average tenor of its debt from the current level. The ratings could come under pressure ifanyofCAF’ssovereignborrowersrunarrearswiththe bank, or if CAF faces significant delays in receiving payments of paid-in capital from its members.
Key recent rAtinG AGency coMMentAry
Fitch
A+, outlook stable
CAF’sratingsreflecttheprivilegesconferredonitbyits member countries, its strong capital base, and its solidtrackrecordintermsofassetqualityandself-sustainable profitability. The ratings are limited by the volatility of the economic environment in which the institution operates, relevant loan concentrations, and themembercountries’creditworthiness.CAFhasbeenable to operate without difficulty in successive periods of instability in the region due to a conservative operatingpolicyandthemembercountries’support.CAF’sshareholdersaremostlygovernmentsandpublic agencies. The shareholders have demonstrated strong support in the form of capital contributions and privileges and immunities. As CAF is one of the few providers of long- and medium-term financing to the region, Fitch considers that its shareholders have a vested interest in supporting the company should it berequired.However,somedoubtsremainconcerningtheir ability to provide such support.
Key recent rAtinG AGency coMMentAry