CAF Raises A$275 Million in First South American Kangaroo Issue

Corporacion Andina de Fomento, a Caracas, Venezuela-based development bank, sold A$275 million ($248 million) of three-year Kangaroo notes, the first bond sale in Australia by a South American issuer, according to data compiled by Bloomberg.

The securities due Sept. 1, 2016 were priced to yield 175 basis points more than Australian federal government debt, according to an e-mailed statement from Deutsche Bank AG, which managed the transaction along with Westpac Banking Corp. The supranational organization, whose stated aim is to promote sustainable development in the region, carries the fourth-highest credit rating from all three major ratings companies.

CAF’s foray into the Australian market follows issues in currencies including U.S. dollars, Swiss francs and euros, Bloomberg-compiled data show. While other supranational lenders from Europe, North America and Asia have tapped the Australian market previously, they typically carry the highest credit ratings and price their issues at narrower spreads.

The World Bank’s International Bank for Reconstruction and Development also sold Kangaroo bonds today, pricing a A$500 million increase to its January 2018 line at a spread of 57.5 basis points over government notes. Inter-American Development Bank issued an additional A$100 million of its May 2023 securities on Aug. 19, pricing the transaction at 77.25 basis points over the sovereign rate.

Kangaroo bonds are Australian dollar-denominated notes sold by foreign issuers in Australia.

CAF’s projects include rural electricity ventures in Bolivia and sanitation programs in Ecuador, according to its website.

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