CABEI Upgrades Credit Rating

According to JCR’s press release dated April 1st, 2014, “the rating upgrade reflects the bank’s steady progress on its substantial capital enhancement plan approved in 2009 and the improvement on its financial soundness under its management modernization plan.”

Additionally, the rating agency positively valued other aspects related to CABEI’s financial management, such as the asset quality improvement and its constant efforts to diversify funding sources and extend its liabilities’ maturity lengths.

The announcement also highlighted CABEI’s crucial role as an invaluable regional multilateral development bank in Central America, considering: i) its importance to the regional member countries as a stable provider of long-term financial resources, ii) its track record of solid operations for over 50 years since its establishment in 1960, iii) the international community’s support to CABEI as an indispensable organization in Central America, iv) its  preferred creditor status, and v) conservative financial structure and sufficient liquidity.

CABEI’s CFO, Hernán Danery Alvarado, indicated that this rating upgrade placed CABEI in a privileged position to an important investor base, noting that since 1997 CABEI has recurrently issued in the Asian market, including countries such as Taiwan, Japan, Singapore, Hong Kong and Thailand, an aggregate amount of over US$ 1.2 billion. He added that as part of its diversification strategy CABEI plans to venture into the Australian market in the short term. The CFO also indicated that the continuous upgrades in CABEI’s credit ratings allow the institution to obtain funds on more favorable terms, which in turn allows the Bank to offer better conditions to finance projects for the development of the beneficiary countries.

For his part, CABEI’s Executive President, Dr. Nick Rischbieth, emphasized the importance for CABEI of reaching its first credit rating in the AA range, placing the institution on a level considered a “high investment grade”, in which financial obligations are considered as high quality obligations with very low credit risk. Based on the above, he highlighted that CABEI has been the Multilateral Bank in Latin America whose credit ratings have improved more rapidly throughout the years, obtaining 12 upgrades since 2002, when CABEI’s first ratings were published in the range of BBB. The Executive President of the institution attributed this celerity in the enhancement of CABEI’s credit ratings to the institution’s solid financial position, reinforced by its conservative financial policies and an adequate asset and liability management. He also highlighted the importance of the capital increase approved by CABEI’s Board of Governors in 2009 and the support from its member countries reflected in the preferred creditor status they give CABEI.

Dr. Rischbieth also emphasized the importance of CABEI’s “Back to Basics” Strategy with a renewed focus on public sector development as a part of its Modernization Plan’s guidelines promoted by CABEI since 2011, which has also strengthened its risk management framework, placing the institution in a favorable position for the next strategic period 2015-2019.

CABEI is the leading provider of financial solutions for the development of the region. In 2013, CABEI continued channeling resources to the region reaching a loan portfolio of $5,395 million, which reflects the institution’s commitment towards the development and integration of its member countries.
CABEI’s current long term ratings are: Standard & Poor's “A”, Moody's Investors Service “A1”, Fitch Ratings “A” and Japan Credit Rating Agency “AA-“.

About Japan Credit Rating Agency (JCR): It is Japan’s main Rating Agency, providing rating services for long and short-term debts, including medium-term note programs and asset-backed securities, ratings for financial and public sector institutions, as well as for supranationals, governments, medical and educational institutions.

About CABEI: Headquartered in Tegucigalpa, Honduras, CABEI is the main multilateral bank in Central America, founded in 1960 by Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica as part of the regional integration process and with the objective of promoting the economic and social development of Central America.