Fitch Rates Corporacion Andina de Fomento's JPY Bonds 'A+'.
CAF will use the net proceeds for general corporate purposes, including but not limited to funding its lending operations. Following the settlement of this offering, the total amount of bonds outstanding under the Retail Target Samurai Bond Program will reach JPY24.4billion.
CAF's ratings reflect the privileges conferred on it by its member countries, its adequate capital base and its solid track record in terms of asset quality and self-sustainable profitability. The ratings are limited by economic volatility in some of the countries in which the institution operates, the member countries' creditworthiness relative to higher rated multinational development banks (MDBs) and, although decreasing, relevant loan concentrations. CAF has been able to operate without difficulty in successive periods of instability in the region due to a conservative operating policy and the member countries' support.
CAF's shareholders are mostly governments and public agencies. The shareholders have demonstrated strong support with continuous capital contributions to sustain CAF's expansion, while regular privileges and immunities are provided similar to other MDBs. 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 it should it be required. However, some doubts remain concerning their ability to provide such support given the mostly sub-investment grade ratings of its shareholders.
CAF is an MDB established in 1968 to assist in the economic development of its member countries. CAF is headquartered in Caracas, Venezuela. It focuses on providing medium- and long-term project loans and trade finance. At YE 2010 CAF was 85% owned by the Andean countries (Bolivia, Colombia, Ecuador, Peru and Venezuela), Brazil, Panama and Uruguay. The remaining stake belongs to a number of non-regional member states and 14 private-sector banks.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Available Research:
--'Rating Multilateral Development Banks and Other Supranationals' (March 18, 2010).
Applicable Criteria and Related Research:
Rating Multilateral Development Banks and Other Supranationals
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|Date:||Jun 21, 2011|
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