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Latin America - Best financial borrower of the year

CABEI

The Central American Bank for Economic Integration (CABEI) is not well known in the international capital markets. Before April of this year, it had never issued a bond.

But now is a good time to be issuing debt, and CABEI's debut issue, a 10-year $200 million 10-year bond lead managed by Salomon Smith Barney, turned out to be a huge success.

Playing off CABEI's investment-grade credit rating from all three agencies, Salomon managed to line up 43 investors in the US, Europe and Latin America, who between them ordered almost $700 million of bonds. That allowed the bond to price at 290 basis points over treasuries, 10bp through the price guidance in "the 300bp area"; what's more, the bond rallied healthily in the aftermarket.

The CABEI bond was not only a debut for this particular agency but was also the first inaugural issue for any agency since CAF first tapped the bond markets when they were in their very infancy, in 1993. What that meant was that CABEI could sell a compelling scarcity-value story to investors looking for diversification in an asset class where demand is hugely outstripping supply.

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