CAF, the development bank for Latin America and the Caribbean, has issued a five-year benchmark bond worth GBP 1 billion in the UK market. The bond, which matures in January 2031, was arranged with support from BMO, Citibank, HSBC, and Banco Santander.
The fixed annual coupon for the bond is set at 4.375%, with a spread of 44.6 basis points over the UK gilt maturing in March 2031.
Investor demand for this issuance reached record levels for CAF in the sterling market. The order book surpassed GBP 5.7 billion, with participation from more than 100 investors. Asset managers and banks made up 84% of those involved, while UK-based investors accounted for 77% of the geographic distribution. CAF holds credit ratings of Aa3 from Moody’s, AA+ from S&P, and AA- from Fitch.
Sergio Diaz-Granados, executive president of CAF, stated: “This successful sterling issuance confirms the international market’s confidence in CAF’s financial strength and its role as the region’s development bank. By expanding and diversifying our sources of financing, we strengthen our ability to support projects that promote sustainable growth, regional integration and social inclusion in Latin America and the Caribbean.”
This is CAF’s third sterling benchmark issue since returning to the UK market in April 2024. The announcement follows a period of increased activity by CAF in international markets, including a recent USD 2 billion ten-year bond placement that also attracted strong investor interest.
CAF aims to use proceeds from such issuances to finance sustainable infrastructure projects, climate action initiatives, social development programs, and regional integration efforts across its shareholder countries.
