CABEI executes its largest issuance yet, amidst the COVID-19 global crisis
Tapping the US Benchmark market after 8 years, this transaction is the largest ever in CABEI’s 60-year history. Despite the COVID-19 crisis, CABEI confirms its continuous access to the International Capital Markets, evidencing its strong credit profile and franchise value.
Tegucigalpa, April 29, 2020.- The Central American Bank for Economic Integration (CABEI) placed its largest bond issuance ever despite challenging market conditions. Through this historical bond issuance, CABEI was able to once again showcase its strong credit profile and franchise value.
In transition towards the Sovereigns, Supranationals and Agencies (SSA) market through its recently improved “AA” rating, which no other Latin American issuer can boast, CABEI made its way back to the US Dollar Benchmark Market after 8 years through a 144A transaction, as part of its renewed funding strategy which will see the Bank become a frequent issuer in the aforementioned market.
Through this 5-year tenor bond issuance under its Medium-Term Notes Program (MTN), priced at 99.986% with a 2.00% coupon, the Bank was able to raise US$750 million. The proceeds of this issuance will be of relevance to CABEI in light of its Emergency Program for 1.96bn to support the Central American region and its member countries under the current global pandemic and economic crisis.
The distribution of the issuance amongst investors, with a high level of diversification, was: 47% Asian investors, 27% US investors, 19% European investors, 4% Latin American investors and 3% African investors; including SSAs/Central Banks, Asset Managers, Hedge Funds, Corporates and Private Banks among others, resulting in a well-diversified/high-quality transaction with more than 75 accounts.
CABEI’s Executive President, Dr. Dante Mossi, stated that, “CABEI’s recent capitalization amidst the COVID-19 crisis, is a clear and undisputed sign of the support from its member countries; which, in tandem with this historic US benchmark issuance, will provide the necessary resources to address the Pandemic and global economic downturn affecting the region. This timely and decisive response by CABEI reflects its relevance to the Central American region as its main source of multilateral funds”.
Currently, CABEI’s credit ratings in an international scale are: Standard & Poor’s with a rating of AA (stable outlook), Moody’s with Aa3 (stable outlook) and Japan Credit Rating (JCR) with AA (stable outlook), reaffirming the Bank’s financial strength.