Fitch upgrades CAF’s rating to AA-
January 13, 2023
The strengthening of CAF’s credit profile thanks to the historic capital increase approved by its shareholders, the accession of new full members and the bank’s improved solvency, are some of the aspects highlighted by risk rating agency Fitch Ratings in its report. Thus, CAF boasts its best-ever credit rating by rating agencies Fitch, S&P Global, Moody’s and JCR.
The rating firm Fitch Ratings upgraded the long-term risk rating of CAF—development bank of Latin America—, from A+ to AA- with a Stable outlook. This reaffirms investor confidence in CAF, and will allow the bank to offer financing on better terms to its member countries.
In its report, Fitch highlighted the commitment of CAF’s shareholder countries to bolstering the institution’s assets with a USD 7 billion capital increase, the largest in its history. It also noted that several countries have already signed this agreement and have started to disburse their respective contributions.
“The upgrade of CAF’s ratings reflects a stronger independent credit profile from A+ to AA-, supported by the review in the bank’s solvency assessment. The recently approved substantial capital increase and the favorable dynamics of the loan portfolio will surely underpin the continuous improvement of CAF’s solvency profile. The capital contributions from CAF’s shareholders will support credit expansion and diversification of the bank’s portfolio in the coming years, while helping to maintain the ‘excellent’ capitalization indicators,” Fitch explained in a press release.
CAF Executive President Sergio Díaz-Granados said: “We started the year with good news for all Latin Americans and Caribbeans, who will now be able to access better financing conditions to advance social programs and strategic projects that will improve their quality of life. The news came in the form of Fitch’s upgraded rating, thanks to the commitment of the countries to strengthen CAF and to place their trust in us to continue realizing our goal of becoming the green bank and the bank of economic and social recovery of the region.”
Fitch Ratings also highlighted CAF’s strategy of raising the number of shareholders, including Chile, Costa Rica and the Dominican Republic, which became full members, as well as the accession of new shareholders such as El Salvador and Honduras, which are also working towards full membership.
Thus, CAF reaches the best credit rating in its history by rating agencies Fitch, S&P Global, Moody's and JCR.
CAF has been engaged in a diversification strategy for its financing sources for the past three decades, through an uninterrupted presence in global capital markets, which has given it a privileged position internationally. CAF promotes sustainable development and regional integration through efficient funds mobilization for the timely provision of high-value-added multiple financial services to clients in the public and private sectors of shareholder countries.