CABEI Approves Historic Capital Increase
Tegucigalpa, December 9 2019 - The Central American Bank for Economic Integration’s (CABEI) Board of Governors increased the Institution’s authorized capital by US$2.0 billion, from US$5.0 billion to US$7.0 billion, and established the conditions applicable to the subscription of shares under the aforementioned capital increase.
This is the Bank’s Eighth General Capital Increase and the second one in less than ten (10) years, confirming CABEI’s high franchise value, as well as its relevance for the region as the main provider of financial resources, disbursing almost US$30.0 billion since its foundation in 1960. This increase in CABEI’s authorized capital will generate new paid-in capital installments for at least US$255 million, starting 2020.
In that regard, CABEI’s Executive President, Dr. Dante Mossi, stated that the approval of an Eighth General Capital Increase constitutes an indisputable sign of the support that member countries are granting the Institution, in contrast to the challenges other Multilateral Banks are facing on this particular issue. As such, and in light of CABEI’s upcoming five-year strategic period (2020 - 2024), he highlighted that the implementation of the capital increase will boost institutional credit capacity by approximately 45%, which results in increased loan approvals for approximately US$1 billion per year; whereby, the average loan approvals per year will exceed US$3.0 billion.
In addition, Dr. Mossi stressed that this new capitalization exercise will also enhance CABEI’s financial profile by freeing up the necessary capital to promote the incorporation of new members. Along these lines, President Mossi stated that, although the Bank is already the best risk in Latin America with all its ratings in the “AA” range, there is room to improve, and as such, CABEI will pursue a “AAA” rating within the framework of this capital increase. The latter in order to enhance the financial conditions offered by CABEI to its borrowing countries, placing them at levels similar to those offered by “AAA” rated multilaterals.
Finally, President Mossi emphasized that the increase in the Institution’s credit capacity enabled by the Eighth General Capital Increase, will be, in turn, accompanied by a greater allocation of external resources for operations related to climate change; boosting the flow of financing to countries under competitive financial terms, and further consolidating CABEI's position as the region’s the most relevant multilateral.
