Corporacion Andina de Fomento ("CAF") announced today its intention to:

CARACAS, Venezuela, June 7, 2012 /PRNewswire/ --

1.  THE CASH OFFERING

The new notes that are issued to investors for cash in the Cash Offering (if any are issued) (the "New Notes") are expected to mature in 2022 on or about the ten year anniversary of their date of issuance. 

The New Notes will not be redeemable prior to maturity and will not be entitled to the benefit of any sinking fund. 

The aggregate principal amount of New Notes to be issued in the Cash Offering will be determined at the time of final pricing.

The New Notes will bear interest at a fixed rate of interest per annum that will be determined at the time of final pricing. 

Upon issuance, the New Notes will be direct, unconditional and general obligations of CAF and will rank equally, without any preference among themselves, with all other unsecured and unsubordinated indebtedness of CAF. 

Deutsche Bank Securities Inc., Goldman, Sachs & Co. and HSBC are acting as the Joint Lead Underwriters in connection with the Cash Offering. 

CAF is making the Cash Offering only in those jurisdictions where it is legal to do so. The Cash Offering is void in all jurisdictions where it is prohibited.  If materials relating to the Cash Offering come into your possession, you are required by CAF to inform yourself of and to observe all of these restrictions.  The materials relating to the Cash Offering will not constitute, and may not be used in connection with, an offer or solicitation in any place where offers or solicitations are not permitted by law.

2.  THE EXCHANGE INVITATION

Following the determination of the final pricing of the New Notes in the Cash Offering, CAF plans to invite the holders of the following series of its outstanding notes (collectively, the "Old Notes"), subject to certain conditions, to submit offers to exchange Old Notes for new notes (the "Reopened Notes").

The Reopened Notes, if and when issued, will be a further issuance of, will form a single series with and will be fully fungible with, the New Notes issued in connection with the Cash Offering. 

The aggregate principal amount of Reopened Notes that CAF may issue in connection with the Exchange Invitation may equal, but is not expected to exceed, U.S.$500,000,000.  This amount remains subject to modification by CAF in its sole discretion.

If the Exchange Invitation is launched, and the principal amount of Reopened Notes that would be issued pursuant to the Exchange Invitation if CAF accepted all validly tendered Old Notes were to exceed the principal amount of Reopened Notes that CAF intends to issue, then CAF anticipates accepting 2019 Notes and 2017 Notes in the order of priority set forth in the table above.  Notwithstanding the Acceptance Priority Levels, CAF will reserve the right to determine the aggregate principal amount of 2019 Notes and the aggregate principal amount of 2017 Notes that it will accept pursuant to the Exchange Invitation in its sole discretion.

Deutsche Bank Securities Inc., Goldman, Sachs & Co. and HSBC are expected to act as Dealer Managers in connection with the Exchange Invitation. 

Details of the Exchange Invitation, if it is launched, will be contained in a separate prospectus supplement.  CAF reserves the right, in its sole discretion, not to launch the Exchange Invitation or, if the Exchange Invitation is launched, not to accept tenders for, or issue, for any reason, Reopened Notes. 

For each U.S.$1,000 in outstanding principal amount of Old Notes that CAF accepts for exchange, the tendering holder will receive a principal amount of Reopened Notes equal to the exchange ratio (the "Exchange Ratio") for such series of Old Notes that CAF will announce at the launch of the Exchange Invitation. 

The Exchange Ratio for each series of Old Notes will be calculated by multiplying the Old Note Value (as defined below) of such series by $1,000 and dividing this number by the issue price of the New Notes (as determined at the time of final pricing of the New Notes). 

The "Old Note Value" for each series of Old Notes will be the price of such series that is calculated based on a yield to maturity on the expected settlement date of the exchange equal to the "New Issue Yield" for the New Notes (to be determined at the time of final pricing of the New Notes) less the Relative Spread indicated for such series of Old Notes in the table above.

If the Exchange Invitation is launched, the Exchange Ratio, as calculated using the New Issue Yield and Relative Spread, will be fixed at the time the New Notes are priced and provided in the prospectus supplement.  The Exchange Invitation, if launched, is expected to be held open until 5:00 P.M., New York City time, on June 12, 2012, unless CAF in its sole discretion decides to extend the Exchange Invitation or to terminate it earlier.

If the Exchange Invitation is launched, CAF will make the Exchange Invitation only in those jurisdictions where it is legal to do so. The Exchange Invitation will be void in all jurisdictions where it is prohibited. If materials relating to the Exchange Invitation come into your possession, you are required by CAF to inform yourself of and to observe all of these restrictions. The materials relating to the Exchange Invitation will not constitute, and may not be used in connection with, an offer or solicitation in any place where offers or solicitations are not permitted by law. If a jurisdiction requires that the Exchange Invitation be made by a licensed broker or dealer and any joint dealer manager or any affiliate of a joint dealer manager is a licensed broker or dealer in that jurisdiction, the Exchange Invitation shall be deemed to be made by such joint dealer manager or such affiliate on behalf of CAF in that jurisdiction.

3.  FURTHER INFORMATION

A written prospectus supplement in respect of the Cash Offering (and accompanying prospectus) and, when available, a written prospectus supplement in respect of the Exchange Invitation (and accompanying prospectus) may be obtained free of charge from any of the following:

Deutsche Bank Securities
Prospectus Department
Harborside Financial Center
100 Plaza One
Jersey City, NJ 07311
Telephone: 1-800-503-4611
Email: [email protected]

Goldman, Sachs & Co.
Prospectus Department
200 West Street
New York, NY 10282
Telephone: 1-866-471-2526
Facsimile: 212-902-9316
Email: [email protected]

HSBC
452 Fifth Avenue
New York, NY 10018
Telephone: 1-877-472-2456 / 212-525-5552
Facsimile: 646-366-3384
Email: [email protected]

CAF will apply to the Financial Services Authority in its capacity as competent authority pursuant to Part VI of the Financial Services and Markets Act 2000 (the "UK Listing Authority") for the notes to be admitted to the official list of the UK Listing Authority and to the London Stock Exchange plc (the "London Stock Exchange") for the notes to be admitted to trading on the London Stock Exchange's Regulated Market.  The London Stock Exchange's Regulated Market is a regulated market for the purposes of Directive 2004/39/EC.

This document is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (as so amended, the "Order") and (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Articles 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

In connection with the issue of the New Notes or Reopened Notes, persons named as the Stabilizing Manager(s) (or persons acting on behalf of any Stabilizing Manager(s)) in the applicable prospectus supplement may over-allot notes or effect transactions with a view to supporting the market price of such notes at a level higher than that which might otherwise prevail. However, there is no assurance that the Stabilizing Manager(s) (or persons acting on behalf of a Stabilizing Manager) will undertake stabilization action. Any stabilization action may begin on or after the date on which adequate public disclosure of the terms of the offer of such notes is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue date of such notes and 60 days after the date of the allotment of such notes. Any stabilization action or over-allotment must be conducted by the relevant Stabilizing Manager(s) (or person(s) acting on behalf of any Stabilizing Manager(s)) in accordance with all applicable laws and rules.

SOURCE Corporacion Andina de Fomento