CABEI: financial soundness for the region's well-being


CABEI arrives at its LXI Ordinary Meeting of the Board of Governors as the best credit risk in Latin America.

Tegucigalpa, September 1, 2021 - The Central American Bank for Economic Integration (CABEI)'s growing and diversified shareholder base, its solid commitment to strengthening and expanding its role and reach in the region, as well as its high levels of capitalization and ample liquidity, are further evidence of its financial soundness.

This has been ratified by the two most recognized credit rating agencies in the world: Standard & Poor's, which gave it the best credit rating in Latin America (AA), and Moody's, which recently confirmed the "Aa3" rating with a stable outlook.

"It is in times of crisis that multilateral banks can demonstrate their financial strength to carry out an anti-cyclical role to support their partners in facing it, and this is precisely what we have been doing since last year with the arrival of the COVID-19 pandemic through technical assistance, donations and, above all, effective and timely financial intermediation, ensuring the well-being of our region," explained CABEI Executive President Dr. Dante Mossi.

Among the aspects evaluated by the rating agencies, they agreed on the successful implementation of the VIII Authorized Capital Increase by 40%, from US$5 billion to US$7 billion, as well as the growth and diversification of shareholders. Also, the support measures provided to its member countries in the face of the health and economic crisis caused by the pandemic and natural disasters, which led to the achievement of record amounts of approved and disbursed resources.

In the first half of 2021, CABEI approved more than US$2.09 billion and disbursed more than US$795 million, making it the most dominant source of multilateral financing for Central America, accounting for almost 50% of total loans granted.  

Within these approvals, CABEI's support to the region was not limited to government requests or negotiations with private sector allies, but also demonstrated its capacity to structure programs in record time.

In April 2020, the “COVID-19 Emergency Support and Preparedness and Economic Reactivation Program” was made available to the region with an amount of up to US$3,019 million with different cooperation and financing components, and 182,000 COVID-19 detection tests were distributed among the countries of the Central American Integration System (SICA), which were later complemented with supplies, reagents and equipment for the fight against the virus, as well as economic donations.

In addition, in November, as a result of tropical storms Eta and Iota, the Central American Resilient Reconstruction Program was structured and swiftly approved for up to US$2.513 billion to support emergency response and provide resources to SICA member countries and Colombia to finance projects to address and prevent natural disasters.

Resource capture

During 2020, the Bank executed six transactions in the capital markets for an aggregate amount of US$1,554.8 million, at an approximate weighted average term of 5 years. Such total amount of issuances has been the highest in CABEI's history and represents 39.3% more than the amount of US$1,116.3 million issued during 2019.

Likewise, at the end of the same year, the Bank increased the balance of its certificates of deposit by US$266.6 million (20.4%), reaching US$1,574.0 million, with the main investors being the central banks of the Central American region.

For its part, CABEI's Global Commercial Paper Program presented a balance of US$65.0 million, which represents an increase of US$5.5 million (9.2%), in relation to the balance observed at the close of 2019. Likewise, throughout 2020, resources for US$100.0 million were contracted through short-term bilateral lines.

"We are committed to reach the best international standard in the next five years and continue to ratify through actions and results that we are the best financial and technical support for the development of the region, seeking to consolidate and improve our rating on a continuous basis," concluded Mossi.