Standard & Poor’s affirms CABEI’s ratings; Outlook remains Positive
This rating reflects the multilateral’s strong business and financial profile, as well as the enhancement of its preferred creditor status.
Tegucigalpa. Honduras, July 11, 2017. Standard & Poor’s (S&P) affirmed its 'A' long-term and 'A-1' short-term foreign currency issuer credit ratings on the Central American Bank for Economic Integration (CABEI). The outlook remains positive.
According to S&P’s press release, the rating and its outlook reflect CABEI’s strong business and financial profile, as well as its enhanced preferred creditor status, proven by the recent preferential treatment conferred to it by its borrowing member countries.
Furthermore, and as a signal of a stronger shareholder support, the rating agency highlighted Panama’s and the Dominican Republic’s shareholder participation increase, following the amendments to the bank's Constitutive Agreement, which became effective on June 2016. In addition, S&P emphasized CABEI’s importance to the region as a prominent lender with a long track record of fulfilling its public policy mandate, which, per the rating agency, cannot be readily fulfilled by another private or domestic public institution.
In relation to CABEI's strong financial profile, the Rating Agency considers that over the next two years the bank will likely maintain its current assessment while improving its adjusted risk-adjusted capital (RAC), given the benefits that result from its preferred creditor status and the ongoing equity support from its shareholders.
CABEI’s Executive President, Dr. Nick Rischbieth stated that S&P’s affirmation of the Bank’s 'A' rating and its positive outlook result from a proven and historically strong Preferred Creditor Treatment, and underlined its importance as a pillar of the institution’s solid financial position.
Furthermore, Dr. Rischbieth highlighted the importance and positive impact the Board of Governors’ decision to modify the bank’s Constitutive Agreement and other related regulations has had on the Institution’s credit profile, stating that the Bank has started the route to diversify its loan portfolio, as a key factor determined by rating agencies to improve the Institution’s current credit assessment.
As such, Dr. Rischbieth emphasized that continuous improvements on CABEI’s credit rating strengthen the Institution’s role as the financial arm of the Central American Integration System.
Related News
