Latin Finance - November/December 2010 - 71

CABEI: 50 YEARS
of fostering development and reducing poverty in CENTRAL AMERICA
aving the broader Central America as its footprint region, CABEI, an “A” scale rated international issuer, is the leading provider of financial solutions for the development of this region, providing more than half of the supranational financing the past five years. CABEI relies on capital markets to fund its balance sheet growth and has gone a long way to establish itself as a frequent issuer in the capital markets. An integral part of such strategy has been its activities in local capital markets. Since 2003, CABEI has actively participated in local capital markets via the issuance of deals in Honduras, El Salvador, Costa Rica, and recently in the Dominican Republic and Guatemala. It has also been very active in other countries very much related to Central America, as is the case of Colombia and Mexico, where other Development Banks, have successfully placed bonds employing a wide array of structures and tenors. One of CABEI´s institutional objectives is the strengthening and promoting the development and competitiveness of capital markets in the region. This process consisted of, as a first step, facilitating an increase in the supply of securities issued under a common international markets-compliant vehicle. Thereby registering its Medium-Term-Notes Program (“MTN Program”), a global program listed in the Luxembourg Stock Exchange, in each of the Central American local markets. From a market perspective, one of the more relevant achievements of issuing securities into local markets is related to providing liquidity to local benchmarks. In Honduras, CABEI issued a floater linked to Central Bank bills and in Costa Rica it has issued bonds priced

at the local banking borrowing rate. Another recent achievement is that of conveying longer dated paper to local investors with non-sovereign credit exposure. In terms of asset class, the launching of the Regional Commercial Paper Program in 2009, has opened a whole new set of possibilities in the local markets, as this vehicle can issue dollars and local currency in different structures, from zero coupons to a range of interest bearing securities. “The idea behind this product is to create a vehicle, locally structured, that can issue securities in all of the different markets and currencies, creating a link between them and supporting the integration process, with the driver coming from the buy side” explained Dr. Nick Rischbieth, Executive President of CABEI. The Central American development bank has placed over USD 250 million in securities, mostly in local currencies. Accessing the local currencies has allowed CABEI the opportunity to better implement its high-impact financing programs, targeting sectors such as micro, small and medium size enterprises and small clean energy projects, among others. CABEI is committed to continue its work towards the integration of local capital markets and is currently conducting projects in several fronts, including market openness, dealership, market information technology and regulation. “ We have included in our 2010-2014 strategy, an initiative of supporting local capital markets and helping its participants to better fulfill their purpose based on the strong belief that a better capital markets is key to development, as it closely relates to efficient ways of financing in the short, medium and long term”, commented the institution’s CEO.

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Latin Finance - November/December 2010

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