The Multilateral Bank transfers the efficiencies obtained in its borrowing costs to benefit its borrowing countries.
This action represents its first rate reduction since 2021.
TEGUCIGALPA, Honduras, May 16, 2024 /PRNewswire/ — The Central American Bank for Economic Integration (CABEI) announced today a downward adjustment between 0.50% and 0.65% in the interest rate applicable to current and new sovereign public sector loans that have an adjustable spread rate scheme (Term SOFR + spread).
According to CABEI’s Executive President, Gisela Sánchez, the loans eligible for this improvement are approximately 120 operations that include the already disbursed portfolio, the loans approved pending disbursement, and the approvals contemplated under the 2024 Annual Operational Plan, which, in aggregate, exceed US$12 billion.
Mrs. Gisela Sánchez also added that this reduction in the interest rates of CABEI loans to its borrowing countries is a reflection of the continuous improvement in the bank’s funding costs, particularly in bond issuances deployed in the international capital markets, where we are recognized as the best risk in all of Latin America with a “AA” rating. The objective is to transfer this benefit to the region’s countries, especially considering the current context faced due to high interest rates resulting from efforts to contain global inflationary pressures.
CABEI’s funding strategy contemplates a transversal objective of optimizing costs by diversifying maturities, markets, and instruments, as reflected by the more than 170 bond issuances executed by the Bank in 23 markets and 25 different currencies worldwide. Thus, in markets such as Mexico, CABEI obtains lower costs, and in the Asian and European markets it seeks longer tenors and/or diversification of investors, while the benchmark/global market accompanies the organic growth of its balance sheet.
Finally, President Sánchez reaffirmed her commitment to technical rigorousness and operational efficiency as fundamental elements that accompany this process to enhance CABEI’s competitiveness as the region’s main provider of multilateral resources.
A summary of downward variations in interest rates can be observed in the following table:
|
Comparative Table Summary of Variations in the Spread over 6-Month Term SOFR of Sovereign Interest Rates (%) |
|||
|
Term |
April – June 2024 |
January – March 2024 |
Variation |
|
Up to 5 Years (up to 24 months grace period) |
1.90 % |
2.55 % |
-0.65 % |
|
Up to 10 Years (up to 30 months grace period) |
2.15 % |
2.80 % |
-0.65 % |
|
Up to 15 Years (up to 36 months grace period) |
2.40 % |
3.05 % |
-0.65 % |
|
Up to 20 Years (up to 60 months grace period) |
2.65 % |
3.15 % |
-0.50 % |
CABEI Financial Conditions published quarterly. Go to the website.
“AA” Bank
CABEI is a multilateral development finance institution with a 63-year history and 15 member countries, including all the countries of Central America, Panama, the Dominican Republic, Mexico, Colombia, Argentina, and Cuba, on the American continent; Spain, on the European continent; and the Republic of Korea, and the Republic of China (Taiwan), on the Asian continent.
CABEI holds a AA Stable A1+ rating from S&P (September 2023), a Aa3 Stable P1 rating from Moody’s (August 2023) and a AA Stable rating from JCR (April 2023).
Tel.: +504 2240-2222, P.O. Box 772, Tegucigalpa, M.D.C., Honduras, C.A. www.bcie.org
SOURCE CABEI
