Investor Presentation. June 2017

Transcription

1 Investor Presentation June 2017

2 Table of Contents CAF Overview Financial Highlights Funding Strategy Key Investment Factors

3 CAF Overview The Development Bank of Latin America CAF is a Supranational financial institution owned by Latin American countries 47 years financing sustainable development and regional integration Leading development bank in financing infrastructure and energy projects in Latin America Enjoys Preferred Creditor Status in its shareholder countries Rated Aa3/AA-/AA- by Moody s, S&P and Fitch 3

4 CAF Overview From five shareholder countries at inception to its current nineteen Broad Shareholder Base As of March 31, 2017 Full Members Peru 18.4% Venezuela 17.6% Colombia 17.6% Argentina 9.2% Brazil 8.9% Ecuador 5.3% Bolivia 5.2% Uruguay 2.9% Panama 2.5% Paraguay 2.5% Trinidad y Tobago 2.5% Associated Members Spain 4.1% Mexico 1.2% Dominican Republic 0.7% Chile 0.6% Costa Rica 0.3% Portugal 0.1% Barbados 0.4% Jamaica 0.02% Commercial Banks 0.04%

5 CAF Overview CAF s offices Ciudad de México Panama Quito Bogotá Caracas Madrid Trinidad & Tobago Thirteen Offices including three Regional Office. Lima La Paz Brasilia Asuncion Buenos Aires Montevideo Headquarters Regional Offices Country Offices 5

6 CAF Overview Preferred Creditor Status 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

7 CAF Overview Proven Preferred Creditor Status Venezuela (1994) Foreign Exchange controls Peru (1980 s) Moratorium on external debt payments Bolivia (1998) HIPC Initiative Argentina ( ) Financial crisis and default on external debt Ecuador (2008) Default on several bonds EM (2012) Commodity Prices CAF s Rating Baa3 Baa2 A3 A2 A1 Aa3 Mexico (1994) Tequila Crisis Asia (1997) Financial Crisis Russia (1998) Default on debt Venezuela (2003) Oil Strike USA (2007) Subprime Mortgage Crisis Europe (2009) Sovereign debt crisis USA (2015) FED hiking rates None of these events have affected payments to CAF Rating evolution assigned by Moody s 7

8 CAF Overview Strong Fundamentals Agency Rating Remarks AA- (Stable) CAF has been able to operate without difficulty in successive periods of instability in the region due to conservative risk management policies and member countries' support. Fitch, February, 2017 Aa3 (Stable) AA- (Stable) AA (Stable) CAF s strong asset performance is a key credit strength that reflects prudent risk management and a strong sense of ownership by borrowing countries that serves as a strong incentive to fulfill their commitments to the institution. - Moody s, September, 2016 We revised the outlook to stable from negative based on CAF's improving liquidity and capital ratios. CAF's liquid assets are of sufficient quantity and quality that we expect it would, under our stress scenario, be able to service its debts and maintain operations for one year without capital market access. - Standard & Poor s, June, 2017 CAF s asset quality has been maintained extremely well... There has been no records of principal and interest payment delinquencies for more than 180 days in its public portfolio JCR, January,

9 Table of Contents CAF Overview Financial Highlights Funding Strategy Key Investment Factors

10 Financial Highlights Balance Sheet (in billions of US$) Assets Liabilities/Equity Liquidity $12.6 (35%) $26.0 (67%) Borrowings Loans $22.4 (61%) Other (4%) Total $10.6 (29%) US$ 35.6 US$ 35.6 Other (4%) Stockholders Equity Figures as of March 31,

11 Financial Highlights Liquid Assets (in billions of US$) (*) Figures as of December of each year (*) As of March 31,

12 Financial Highlights Improvement of Liquidity Ratios 48.5% 49.5% 50.4% 51.2% 43.7% 30.3% 33.3% 33.2% 33.6% 34.4% (*) Liquid Assets/Financial Liabilities Liquid Assets/Total Assets Figures as of December of each year (*) As of March 31,

13 Financial Highlights Liquidity Portfolio Composition CP's 26% Time Deposits 28% 92.2% of liquid assets are rated A- or above with an overall AA average US Treasury Notes 13% Coporate and Financial Bonds 9% CD's 16% *Others 6% 100% of instruments can be settled by T+3 Maximum duration allowed: 1.5 years Present duration: 0.33 years (*)Others correspond to money market funds, liquidity funds, deposits in cash and bonds of non-u.s. governments and other government entities. 13 Figures as of March 31, 2017

14 Financial Highlights Loan Portfolio (in billions of US$) % 0.09% 0.00% 0.55% 0.48% (*) Loan Portfolio Non-accrual Loans / Loan Portfolio Compound annual growth rate ( ): 7.6% Figures as of December of each year (*) As of March 31,

15 Financial Highlights Loan Portfolio by Country and Sector Brazil 11.2% Argentina 12.5% Mexico 0.8% Colombia 10.9% Uruguay 4.5% Ecuador 15.0% Private Sector 16% Bolivia 10.0% Paraguay 1.6% Public Sector 84% Venezuela 14.8% Peru 10.0% Spain 0.1% Panama 6.0% Others 2.5% Figures as of March 31,

16 Financial Highlights Loan Portfolio by Industry Water and Sanitation 7% Energy 27% Transportation 33% Others 8% Financial Intermediaries 11% Social Development 14% Social Development includes health, education and other social services Financial Intermediaries include commercial and development banks Others include mining activities, commerce and tourism among others Figures as of March 31,

17 Financial Highlights Stockholders Equity (in billions of US$) Retained Earnings and Reserves (US$2.8 bn) Paid-in capital (US$7.8 bn) (*) In addition, member countries have subscribed US$1.6 bn in callable capital Figures as of December of each year (*) As of March 31,

18 Financial Highlights Strong Support from Shareholders In November 2015, the Board of Directors approved a New General Paid-in Capital Increase of USD 4.5 bn Series A and B shareholders will contribute USD 4.0 bn while USD 0.5 bn will be available for Series C shareholders The contributions will begin in 2017 As of today, eleven of our shareholder countries have subscribed for new paid in capital shares for US$ 3.3 billion 18

19 Financial Highlights Consistent Profitability Profitability ratios 4% 3% 2% 1.4% 1% 0% % (*) ROE ROA Operating Income (in millions of US$) $205 $136 $135 $204 $35 (*) Figures as of December of each year (*) Operating income for the quarter ended in March 31,2017. ROE and ROA have been annualized 19

20 Financial Highlights Multilateral Financial Institution CAF s Ranking Ratings (Standard & Poor s) AA- AAA AAA AAA AAA AAA Equity / Assets (%) 1 st Liquidity / Total Assets (%) 3 rd Largest Exposure /Total Portfolio (%) 1 st Equity / Impaired loans (x) 1 st N.M Return on Assets (%) 4 th Admin. Expenses / Average Equity(%) 1 st Source: Standard & Poor s Supranational Special Edition Figures as of end of year 2015 N.M. : Not meaningful 20

21 Table of Contents CAF Overview Financial Highlights Funding Strategy Key Investment Factors

22 Funding Strategy Diversified and competitive funding Composition of Financial Liabilities Long-term loans 6% Term Deposits 14% Bonds 72% CP's 8% Figures as of March 31,

23 Objectives Investor presentation Funding Strategy Bond Strategy Strategies Investor Diversification i) Capital market programs in place in strategic markets ii) Issuance of thematic bonds Cost Optimization Generate various reference points Asset / Liability Duration Match Liquid Bonds in Secondary Market Use of private placements to modify the average duration of liabilities Benchmark size issues 23

24 sstand Investor presentation Funding Strategy Capital Market Programs US Shelf EMTN Japan Shelf AMTN Domestic Programs Schedule B Issuer US Dollar Benchmark deals (USD 1-2 Bn) Tenors 3-10 years Included in relevant indexes Listed in LSE exchange Benchmark deals in different currencies EUR, CHF, GBP, RMB Targeted and custom made notes Tenors 2-30 years Listed (when required) Standard documentation Institutional and Retail - Samurais Tenors 2-10 years Australian Dollar Benchmark deals Program size: AUD 2 Bn Targeted towards local and foreign investors Aimed to foster development of local financial markets Registered programs in Colombia, Peru, Mexico and Venezuela Alone Issues Schuldschein, other 24

25 Funding Strategy Active in Debt Capital Markets Bond Composition by Currency CHF 13% CAF has USD 17.7 EUR 31% AUD 5% HKD 4% NOK 3% Others 5% JPY TRY COP MXN BRL billion outstanding bonds denominated in 15 different currencies ZAR USD 38% INR CAD PEN Figures as of March 31,

26 Funding Strategy Social Responsible Investing (SRI) Water Bonds Uridashi Market January 24, 2017 Samurai Market February 12, 2016 BRL MM Maturity 2020 JPY 4.5 BN Maturity 2026 Uridashi Market January 28, 2016 TRY 192 MM Maturity 2020 ZAR 590 MM Maturity

27 Funding Strategy Recent USD Global Benchmark Issues May 10, 2016 USD 1.25 BN CAF 2.00% 2019 Order book had over 115 orders and an oversubscription of USD 2.2 BN Extremely high participation of official institutions and typical SSA investors September 27, 2016 USD 1.00 BN CAF 2.125% 2021 Longest-dated issuance in the USD public markets since 2012 Order book of USD 1.3 BN with final pricing having zero new issue concession CAF s ability to place two liquid benchmarks in USD markets in a 5-month period is a testament to its strengthening credit history 27

28 Funding Strategy Investor Participation Investor Type Distribution Geographical Distribution Other 2% Middle East / Africa 10% Asia 3% Central Banks / Official Institutions 36% Asset Managers 54% Latam 10% Europe 37% Pension / Insurance Companies 3% Banks 5% USA 40% *Figures referred to bond: CAF 2.00% 2019 USD 1.25bn 28

29 Funding Strategy Euro Benchmark Issue Euro Public Bond January 25, 2017 Fourth benchmark-sized euro-denominated public trade Priced at MS + 40 after tigthening from initial price guidance given high demand EUR 800 MM 0.5% Fixed Coupon Maturity: 2021 One third of orderbook was from official institutions and central banks 29

30 Funding Strategy Recent Transactions Public Transactions April 7,2017 CHF 160 MM March 14, 2017 AUD 175 MM March 14, 2017 INR 2,138 MM March 31, 2016 AUD 110 MM and 150MM CAF 0.30% 2025 Swiss Market CAF 4.50% 2027 Australian Market CAF 5.88% 2022 Uridashi Market CAF 4.5%/4.0% 2026/2021 Australian Market Private Placements March 2, 2017 CAD 40 MM March 24, 2017 HKD 1.62 BN August 30, 2016 USD 30.7 MM August 2, 2016 HKD 942MM CAF 3.500% 2037 Private Placement CAF 3.265% 2027 Private Placement CAF 1.810% 2021 Private Placement CAF 1.810% 2021 Private Placement May 19, 2016 EUR 80.1 MM May 13, 2016 EUR 85.4 MM April 21, 2016 EUR 100 MM February 12, 2016 JPY 4.5 BN CAF 0.130% 2019 Private Placement 0.100% 2019 Private Placement 1.803% 2031 Private Placement CAF 0.450% 2026 Samuari Market 30

31 Funding Strategy Short-term Liabilities Term Deposits Clients: Corporate, Financial and Official Institutions Amounts vary between US$1 500 million USCP and ECP programs Ratings A1+/P-1/F1+ Size: USCP USD 2.0 bn ECP USD 3.0 bn Tenors up to 1 year Dealers: Bank of America Barclays Goldman Sachs Credit Suisse Bloomberg CAF<GO> 31

32 Funding Strategy Long-term Loans Loans from Multilaterals and Export Credit Agencies Agence Française de Développement -AfD China Development Bank CDB India Exim Bank Instituto de Crédito Oficial de España ICO Japan Bank for International Cooperation JBIC KFW Bankengruppe Korea Exim Bank Nordic Investment Bank NIB Swedish Export Credit Corporation - SEK 32

33 Table of Contents CAF Overview Financial Highlights Funding Strategy Key Investment Factors

34 Key Investment Factors Key Investment Factors Credit Rating Evolution A2/A A3/A- 8 Aa2/AA Aa3/AA- 7 A1/A Baa1/BBB+ 3 Baa2/BBB 2 Baa3/BBB Solid Financial Profile Proven preferred creditor status for 47 years Upgraded thirteen times Currently rated AA-/Aa3 Investment in Latin America with limited risks Offers value compared to its peers S&P Moodys JCR Fitch 34

35 Project Snapshots 35

36 Projects Snapshots Noteworthy Projects Location: Argentina Sector: Loan Amount: Description: Objective: Water and sanitation USD 119 million Drinking Water Treatment Plant (La Plata, Ensenada and Berisso) Improve access and quality of drinking water services in La Plata, Ensenada and Berisso 36

37 Projects Snapshots Noteworthy Projects Location: Brazil Sector: Loan Amount: Infrastructure USD 125 millions Description: Urban Infrastructure of Sao Bernardino do Campo Objective: Contribution to the economic and social development and integration of the municipality through investments in road works, urban mobility and drainage. 37

38 Projects Snapshots Noteworthy Projects Location: Sector: Loan Amount: Description: Objective Bolivia Infrastructure USD 220 million Roadwork project El Salto-Monteagudo Enhancement of the road network between the towns of El Salto and Monteagudo. Integration of Oruro, Potosí, Chuquisaca and Santa Cruz 38

39 Projects Snapshots Noteworthy Projects Location: Panama Sector: Water and sanitation Loan Amount: Description: Objective USD 145 million Panama Bay Sanitation Project Improve sanitary conditions in order to reduce pollution in rivers and urban waterways in Panama City by expanding and building new networks of the sanitary sewer system at the western areas of the city. Environmental recovery of the Bay of Panama through the construction of a wastewater treatment plant. 39

40 Projects Snapshots Noteworthy Projects Location: Uruguay Sector: Public administration Loan Amount: Description: USD 300 million Institutional and Financial Restructuring Project Objective Supporting the strengthen of financial management of ANCAP National Administration of Fuel, Alcohol and Portland (Cement company). 40

41 Thank you 41

42 Appendix Disclaimer This presentation is for informational purposes only; it does not constitute an offer to sell or solicitation of an offer to buy any of Corporación Andina de Fomento s securities in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation. The information contained in this document is subject to changes, modifications, additions, clarifications and/or substitutions. Corporación Andina de Fomento ( CAF ) is not responsible for the information contained in this presentation nor for the implications thereof that could be made. CAF does not guarantee, nor can it be held liable for, the content, or the accuracy, truthfulness or completeness, of the material in this document. Additionally, CAF shall under no circumstances be held liable for losses, damages, liabilities or expenses incurred or assumed as a result of the use of this document. CAF, in its sole discretion, may add, change or update this document and its contents without prior notice. ACCORDINGLY, THE USE OF THIS DOCUMENT AND ITS CONTENTS IS THE EXCLUSIVE RESPONSBILITY OF THE USER, AT ITS OWN RISK. Potential users should conduct their own appropriate investigations and consult their legal, accounting and tax advisors in order to make an independent determination of the accuracy, completeness and veracity of the data contained herein and of the suitability and consequences of any use thereof. Nothing in this presentation shall constitute nor shall be construed as a waiver of the immunities, privileges and exemptions granted to CAF by its Constitutive Agreement, by the agreements which CAF has entered or may enter with its shareholder countries, or by the legislation of those states. 42