Investor Presentation September 2019
Table of contents 1. CAF Overview 2. Financial Highlights 3. Funding Strategy 4. Green Bond Program 5. Key Investment Factors 2
CAF Overview
The Development Bank of Latin America • CAF is a Supranational financial institution owned by Latin American countries • 50 years financing sustainable development and regional integration • Leading development bank in financing infrastructure and energy projects in Latin America • Enjoys Preferred Creditor Treatment in its shareholder countries • Rated Aa3/A+/AA- by Moody’s, S&P and Fitch 4
Broad Shareholder Base Full Member Countries Other Shareholders Peru 17.7% Spain 4.4% 2019 From five shareholder Colombia 17.6% Mexico 1.5% countries at inception to its current nineteen Venezuela 16.2% Dominican 0.9% Republic Argentina 9.6% Chile 0.5% Brazil 8.6% Barbados 0.3% Ecuador 5.3% Costa Rica 0.3% Bolivia 5.3% Portugal 0.2% Uruguay 3.1% 1970 Jamaica 0.02% Paraguay 3.1% Commercial Panama 2.9% 0.05% Banks Trinidad & 2.3% Tobago Figures as of June 30, 2019 5
Preferred Creditor Treatment The Constitutive Agreement is an International Treaty that grants several privileges and immunities Art. 47: “…assets of the Corporation, wherever they may be, shall enjoy immunity from expropriations , … or executive measures carried out by any of the Contracting States. ” Art. 48: “ The assets of any kind owned by the Corporation may be freely transferred and converted. ” Art. 50: “…assets of the Institution are exempt from all kinds of restrictions, regulations and control and moratorium measures. ” Art. 52: “ The Corporation is exempt from all kinds of tax encumbrances …” 6
Proven Preferred Creditor Treatment Venezuela (1994) EM (2012) Argentina (2001- 2002) Foreign Exchange controls Commodity Prices Financial crisis and downturn default on external debt Peru (1980 ’ s) Moratorium on external debt Ecuador (2008) Bolivia (1998) payments Default on several HIPC Initiative bonds CAF ’ s Baa2 A3 Baa3 Aa3 A2 A1 Rating ( * ) USA (2007) Venezuela (2003) Subprime Mexico (1994) Oil Strike Mortgage Asia (1997) “ Tequila Crisis ” Crisis Financial Crisis Venezuela (2017) Selective Default Russia (1998) Europe (2009) Default on debt Sovereign debt crisis (*) Assigned by Moody ’ s 7
Financial Highlights
Strong & Liquid Balance Sheet (USD billion) Liabilities/Equity Assets $13.7 Liquidity (34%) $27.1 Borrowings (67%) $25.1 Loans (60%) Other (3%) $12.2 Stockholders ’ Equity (30%) Other (6%) US$ 40.7 US$ 40.7 Figures as of June 30, 2019 9
Short-term and High-rated Liquidity Portfolio (USD billion) Latam 7.5% Middle US & 13.7 East 4.6% 13.0 Canada 12.7 Australia & NZ 12.0 33.4% 3.0% 10.8 Asia 21.3% Europe 30.3% • 91.9% of liquid assets are rated A- or above with an overall AA average 2015 2016 2017 2018 2019 (*) • Maximum duration allowed: 1.5 years Present duration: 0.4 years Figures as of December 31 of each year (*) As of June 30, 2019 10
Consistent Growth and High Quality Loan Portfolio (USD billion) 30.0 25.1 25.1 23.6 25.0 22.0 20.4 20.0 15.0 10.0 5.0 0.59% 0.55% 0.45% 0.36% 0.00% 0.0 2015 2016 2017 2018 2019 * Loan Portfolio Non-accrual Loans / Loan Portfolio Compound annual growth rate (2015-2018): 5.3% Figures as of December 31 of each year (*) As of June 30, 2019 11
Diversified Loan Portfolio By Country & Sector Private Sector Brazil 14% Chile 8.1% Ecuador 1.1% 14.4% Bolivia 10.2% Colombia Barbados 10.5% 0.3% Costa Rica 0.34% Argentina Dominican 14.6% Republic 0.8% Public Sector Panama Trinidad 7.8% &Tobago 86% 2.4% Uruguay Venezuela 3.9% Peru 14.4% Paraguay 8.3% 1.9% Figures as of June 30, 2019 12
Diversified Loan Portfolio By Industries 39% 23% 9% Power generation (hydroelectric, thermal, Waterand sanitation Transport (road, railway, aerial, maritime) • • • wind, solar) Urban development Urban mobility • • Transmissionand distribution Education T elecommunications • • • Health Logistics • • Child nutrition • Figures as of June 30, 2019 13
Strong Capital Base (USD billion) 12.2 11.9 11.1 10.5 9.5 Retained Earnings & Reserves ($3.3 bn) Paid-in capital ($8.9 bn) * 2015 2016 2017 2018 2019 • Last approved paid-in capital increase of $4.5 bn, payments though 2017 - 2024 • Callable capital amounts to USD1.6 bn Figures as of December 31 of each year (*) As of June 30, 2019 14
CAF vs AAA Rated Multilateral Institutions CAF’s Multilateral Financial Institution Ranking Ratings (Fitch/Moody’s/S&P) AA-/Aa3/A+ AAA/Aaa/AAA AAA/Aaa/AAA AAA/Aaa/AAA AAA/Aaa/AAA AAA/Aaa/AAA 1 st 29 26 22 28 29 10 Equity / Assets (%) 3 rd 33 27 39 18 45 18 Liquidity / Total Assets (%) Largest Exposure /Total Portfolio 2 nd 14 17 20 16 22 9 (%) Admin. Expenses / Average 1 st 1.4 2.5 2.5 1.7 2.7 5.6 Equity(%) Source : Standard & Poor’s “ Supranational Special Edition 2018”. Figures as of end of year 2017 15
Funding Strategy
Composition of Financial Liabilities Term Deposits Long-term loans 9% 5% Commercial Papers 4% CAF’s debt maturity profile is in line with the average life of its assets Bonds 82% Figures as of June 30, 2019 17
Strategy in the Debt Capital Markets - Generate various reference points in curves to facilitate price discovery Cost optimization - Develop various debt capital market programs in strategic markets Investor diversification - Issuance of thematic bonds Asset / Liability - Use of private placements to modify the average durations of liabilities duration match - Benchmark size issues Liquidity - Coordination with underwriters and dealers for continuous posting in secondary market 18
Active in Debt Capital Markets Bond distribution by currency JPY CHF TRY 11% AUD COP 5% HKD 3% EUR Outstanding bonds for MXN NOK 35% 3% USD 24.3 bn in 17 BRL Others 5% ZAR different currencies INR IDR CAD USD PEN 38% UYU Figures as of June 30, 2019 19
Recent Benchmark Issues EUR 750 mm – 5 year USD 1.25 bn – 3 year Coupon: 0.6250% Coupon: 3.25% Issued: January 30, 2019 Issued: February 11, 2019 Maturity: January 30, 2024 Maturity: February 11,2022 ISIN: XS1943474483 CUSIP: 219868CB0 • Oversubscribed order book totaling USD 1.7 billion • CAF achieved its sixth reference point in its Euro curve • Main investors were central banks and official institutions • Distribution by investor type: • Distribution by geographical location: Central Banks and OI’s: 37% Asset Managers: 28% Europe: 56% Insurance Companies: 21% Americas: 26% Commercial Banks: 14% Africa, Middle East and Asia: 18% 20
Private Placements June 28, 2019 August 26, 2019 July 23, 2019 USD 140 MM UYU 1,813,5 MM UYU 1,752 MM Satisfying investor needs: CAF 2.97% 2029 CAF 10.4% 2024 CAF 10.4% 2024 Private Placement Private Placement Private Placement • Maturities ranging from 2 – 30 years May 15, 2019 May 3, 2019 April 5, 2019 • Quick execution time EUR 40 MM MXN 965 MM COP 609,500 MM • Wide variety of currencies CAF 0.17% 2023 CAF 9.60% 2039 CAF 6.77% 2028 Private Placement Private Placement Private Placement • Different interest rate structure October 26, 2018 October 29, 2018 September 14, 2018 USD 525 MM USD 400 MM PEN 177 MM CAF Libor3M+0.28% 2020 CAF 3.345% 2021 CAF 4.44% 2021 Private Placement Private Placement Private Placement 21
Thematic Bonds • T hematic bonds offer investors the opportunity to finance CAF’s key initiatives such as education projects and water programs • CAF has issued aproximately USD 350 million in thematic bonds * since 2016 Water Bonds Edu. Bonds Issuer: CAF CAF CAF CAF Ratings: AA-/Aa3/A+ AA-/Aa3/A+ AA-/Aa3/A+ AA-/Aa3/A+ Theme: Water Water Water Education Format: Urisdashi Samurai Urisdashi Private Placement Size: ZAR 590 MM / TRY 192 MM JPY 4,500 MM BRL 220,2 MM USD 140 MM Settlement: 22-jan-16 12-apr-16 24-jan-17 28-jun-19 Maturity: 22-jan-20 12-apr-26 09-jan-20 28-jun-29 Coupon: 9,0% / 10,73% 0,45% 8,10% 2,97% * These thematic bonds do not include green bonds 22
Other Sources of Funding and Cooperation • Green Climate Fund (GCF) • Agence Française de • Agence Française de Green Funds Technical Assistance Credit Facilities Développement • Global Environmental Fund Développement (AfD) (GEF) • BMZ – KfW • European Investment Bank (EIB) • Geothermal Fund KFW • Caixa do Brasil • China Development Bank (CDB) • Adaptation Fund • European Commission – LAIF • India Exim Bank • FASEP France • JBIC • OFID Fund • KFW Bankengruppe • Agencia Española de • Korea Exim Bank Cooperación Internacional • Nordic Investment Bank (NIB) (AECID) • SEK – Sweden • CdP • Cassa Depositi e Prestiti (CdP) • USTDA • United Kingdom 23
Green Bond Program
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