CABEI is consolidated as a high investment grade

Tegucigalpa, Honduras, March 8, 2019 –Standard & Poor's (S&P) upgraded the long-term international credit rating of the Central American Bank for Economic Integration (CABEI) by two notches from A + to AA; with a stable outlook.

According to the official statement issued by the rating agency, the aforementioned upgrade results from the solid preferred creditor treatment that member countries grant the Institution which supports the Bank's capital position and the fact that CABEI has managed to extend its mandate and increase its membership base through the recent incorporation of the Republic of Korea.

As such, S&P highlighted the fact that during the last 10 years, a period they define as an economic cycle, borrowing members have not entered into arrears in their debt service to the Bank; a situation the rating agency considers sustainable towards the future, despite the economic pressures that some countries face.

CABEI’s Executive President, Dr. Dante Mossi, emphasized the importance of reaching an international credit rating of AA which consolidates CABEI as the best rated issuer in all Latin America, placing it at a level deemed as “high” investment grade, under which, obligations are considered as high quality, baring very low credit risk. In this regard, he highlighted the fact that CABEI has been the Multilateral Bank in Latin America whose credit rating has evolved more quickly over the years, after obtaining 16 rating upgrades since its initial BBB- rating published in 2002.

In relation to CABEI's mandate, S&P stated that its assessment of the Bank’s policy importance is supported by key developments following the amendments to CABEI's Constitutive Agreement which became effective in 2016, with the objective of improving the Institution’s governance, increasing its membership base and enabling additional financing through the diversification of its loan portfolio and additional capital injections.

In this regard, Dr. Dante Mossi, highlighted the importance for CABEI of attracting new highly rated members like the Republic of Korea, which has produced a positive and immediate impact on the Bank's financial and business profile; strengthening its institutional governance, while also enhancing the benefits of the cooperation schemes subscribed by CABEI and Korean institutions in favor of its member countries. He also emphasized the fact that the Bank will now be able to access a broader investor base, including central and reserve banks, with the objective of attaining even more competitive funding costs.

Finally, the Executive President stated that this rating upgrade confirms his vision of a stronger unified Central American region, evidenced by CABEI’s franchise value and its relevance as the financial arm of the region. In this regard, he stressed that in the last 10 years, CABEI has consolidated its presence in the region by granting 47% of the disbursements Central America received from Multilateral Development Banks.