Mexico has been a non-regional CABEI member since 1992 with an authorized stake of USD306.25 million in the Bank's share capital and capital contributions of USD76.56 million, ranking as the third largest shareholder within the group of non-regional members with 5.03%.
The contribution that Mexico channels to the Central American region through CABEI is based on various financial cooperation instruments with Banco Nacional de Comercio Exterior S.N.C. (Bancomext) for a total amount of USD520.8 million. The relationship between the Bank and this country was solidified in 2008 with the launching of the Central American Social Housing Development Program. It falls under the framework of the Mesoamerican Integration and Development Project (formerly Plan Puebla Panamá). Since that date, the Mexican government has made resources available to develop a sustainable market for long-term housing finance in the Central American region that addresses the housing deficit and future needs in this area. Throughout the Program's existence, 59 disbursements have been made through 14 intermediary institutions. In total, 192.7% of the initial financing available has been channeled, benefiting a total of 8,032 low- income households, which can now enjoy a more dignified home.
CABEI on the verge of becoming the best risk in Latin America
Moody's Investors Service assigned a positive outlook to CABEI's A1 rating, which reflects the incorporation of the Republic of Korea as an extraregional member and the sustained improvements in its capital adequacy and liquidity ratios.
Tegucigalpa, June 20, 2018.- Moody's Investors Service (Moody's), revised the outlook on the Central American Bank for Economic Integration (CABEI) ratings from "stable" to "positive," and affirmed its 'A1' long-term issuer credit rating.
According to the statement issued by Moody's, the "positive" outlook on CABEI's 'A1' rating reflects the impact of the Republic of Korea’s (Aa2) incorporation as a non-regional member of the Bank, and the sustained improvements that the Bank has had on the ratios used by the Rating Agency to assess the capital adequacy and liquidity position of multilateral banks.
In this regard, Moody's indicated that the Republic of Korea’s incorporation will further diversify and strengthen CABEI's shareholder base, highlighting that the country will become the second largest non-regional member in terms of shareholder participation, through a US$450 million capital subscription equivalent to 9.3% of the Bank's subscribed capital, which in turn takes capital subscribed by 'Aa' rated members from 11% to 20%.
For his part, CABEI’s Executive President, Dr. Nick Rischbieth, stated that the improvement in the Bank's rating outlook by Moody's is the result of the decisions taken by the Board of Governors to modify the institution’s Constitutive Agreement, which included the redefinition of the Central American region through the inclusion of Panama, the Dominican Republic and Belize, and which in turn have bolstered the incorporation of new members and have allowed for the process of diversifying the loan portfolio and strengthening the institution's preferred creditor status.
In this regard, the Executive President stressed the importance for CABEI of attracting a highly rated member like the Republic of Korea, which has had a positive and immediate impact on the Bank's financial profile and will strengthen its institutional governance, while also enhancing the benefits of the cooperation schemes signed between CABEI and Korean institutions in favor of its member countries.
Moody's also highlighted the positive trend in the Bank's capital adequacy and liquidity position. Regarding capital adequacy, the Rating Agency highlighted both CABEI’s loan portfolio diversification process resulting from the amendments to its Constitutive Agreement and the recent approval of the Bank's eighth capital increase from US$5 billion to US$7 billion. In relation to CABEI's liquidity position, Moody's highlighted its asset and liability management framework, which has enabled it to optimize its debt service coverage.
Similarly, Dr. Rischbieth highlighted that CABEI's eighth capital increase constitutes an indisputable sign of the support that member countries are granting to the Institution, and would represent CABEI's second capitalization process in the last decade, in contrast to the challenges faced by multilateral banks on this issue.
Finally, the Executive President stated that the improvement in Moody's credit rating to the Aa3 category is expected to materialize in the coming months, and as such CABEI will have the best credit rating in all of Latin America.
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