Commitment to the well-being of the region
The Republic of China (Taiwan) is one of CABEI’s first non-regional allies and its largest shareholder. Since officially becoming a member in 1992, this country has actively supported the Central American region through cooperation and financing in essential sectors such as agriculture, food security, education, poverty reduction, infrastructure, health and promotion of MSMEs, with accumulated historical contributions amounting to USD238.8 million.
The Republic of China (Taiwan)’s membership strengthened the Bank’s capital structure and fostered the expansion of its shareholder base, serving as a strong reference for other countries to consider joining CABEI. This relationship also allowed the Bank to issue and place bonds for the first time in international markets. By the end of 2023, CABEI has placed 25 bond issues in the Taiwanese capital market, reaching a total of USD3.17 billion. Such activity positions this market as the Bank’s second most relevant source of funds from bond issuance in capital markets.
In addition to its financial contribution, the Republic of China (Taiwan) has played a key role in addressing critical situations in the region. A notable example was the signing of two cooperation contracts with the Bank for a total of USD130 million in 2020 to address the COVID-19 pandemic and boost Central America’s economic recovery. This action represented the most significant contribution made by this member to the region to date.
Another showing of this non-regional member’s commitment to regional growth was the early payment of the first capital installments associated with its two subscriptions under the VIII General Capital Increase, totaling USD8.6 million, made in 2021.
The active participation of the Republic of China (Taiwan) in CABEI’s capital structure has further strengthened its equity base. Its ability to provide extraordinary support has been a key factor in the Bank’s international risk rating upgrade by Standard & Poor’s from “AA” to “AA+”.
In 2021, CABEI opened its representative office in the Republic of China (Taiwan).
CABEI launches yet another Social Bond through its 25th issuance in the Republic of China (Taiwan)
Tegucigalpa, January 11, 2023. The Central American Bank for Economic Integration (CABEI), rated Aa3/AA (Moody’s/S&P), priced a new US$130 million, 10-year Social Bond in the Taiwanese Capital Market. This transaction also represents its second consecutive issuance social bond issuance for 2023, decidedly reflecting CABEI’s commitment to promote sustainable projects in the region, pursuant to its corresponding Social Bond Framework.
CABEI’s Executive President, Dr. Dante Mossi emphasized the relevance of the Republic of China (Taiwan) as the bank’s most relevant market, more than 25 years after its capital markets’ debut, stating that “the Republic of China (Taiwan) is not only our largest shareholder, enabling our “AA” rating, but is also the most important source of funding for the bank; as we have issued more than US$3.2 billion representing 20% of our historical bond issuances”. In that sense, Dr. Mossi also highlighted the fact that “during the past year, more than 36% of our bond issuances were placed in Taiwan, reflecting our position as the best credit in LATAM, but most importantly the trust vested by its investors in times of global financial turmoil.”
As mentioned earlier, this new social bond placement follows the successful launch of a 10-year “Education Bond”, as CABEI continues to provide attractive and competitive investment alternatives to ESG investors, whose proceeds are directed towards the most important development projects within the Central American.
Finally, it is worth noting that this Issuance reaffirms the strong relation between CABEI and Taiwanese investors dating back to 1997, which has continually developed over the years and will continue to evolve given the Bank’s organic growth and further strengthening of its credit rating.
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