Venezuela's CAF offers new notes in exchange for 8 1/8%, 5¾% notes

By Jennifer Chiou

New York, June 7 - Venezuela's Corporacion Andina de Fomento (CAF) announced an upcoming exchange offer for its $1 billion of 8 1/8% notes due 2019 with acceptance priority level 1 and its $750 million of 5¾% notes due 2017 with acceptance priority level 2.

The company plans to offer up to $500 million of new global notes due 2022.

According to a news release, the new notes will not be redeemable prior to maturity and will not be entitled to the benefit of any sinking fund.

Following the determination of final pricing of the new notes, CAF said it will invite holders to tender their notes for exchange.

The exchange ratio for each series of existing notes will be calculated by multiplying the old note value by $1,000 and dividing this number by the issue price of the new notes. The old note value will be calculated using the yield to maturity on the expected settlement date less a relative spread of 75 basis points for the 8 1/8% notes and 170 bps for the 5¾% notes.

The exchange offer is expected to be open until 5 p.m. ET on June 12.

Deutsche Bank Securities Inc. (800 503-4611 or prospectus.cpdg@db.com), Goldman, Sachs & Co. (866 471-2526 or prospectus-ny@ny.email.gs.com) and HSBC (877 472-2456/212 525-5552 or diane.m.kenna@us.hsbc.com) will be the dealer managers.

CAF is a lender based in Caracas, Venezuela.

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