The credit agency highlighted the financial strength of CAF, which will be stronger due to the decision of its shareholder countries to a historic capitalization of USD 7 billion, the incorporation of new members, as well as the commitment to be the Green Bank and an engine to economic recovery in Latin America and the Caribbean.
The credit rating agency Standard and Poor’s (S&P Global) raised its long term credit rating for CAF -development bank of Latin America – from AA- to A+ – as well as its short term credit rating from A-1 to A-1+. The outlook of the rating continuous to be positive. This upgrading strengthens the confidence of CAF´s investors, and will allow the institution to offer better financing to its member countries.
CAF´s considers the upgrade as a recognition of the confidence placed by its shareholders in the strategy to become the Green Bank of Latin America, of the economic recovery, the private sector and subnational governments, reflected in the highest capitalization in the history of the multilateral institution of $7 billion approved by the Shareholders’ General Assembly this past March.
“The importance of CAF’s policy remains strong with an attractive value proposition evidenced by the expansion of the membership of current shareholders who are increasing their participation and new members joining the institution. The positive outlook reflects our opinion of the important role of CAF for policy making and its capital position can be strengthened due to a substantial capital support from its members”, issued S&P Global in a press release.
CAF Executive President Sergio Díaz-Granados said: “We are thrilled with this new rating because CAF is one of the main active in our region, and this upgrade will mean better conditions to finance projects that have an impact on millions of people. This is an accomplishment of our shareholder countries who for more than 50 years have believed in and supported this institution which is an example of integration and whose ultimate goal is to provide better opportunities for all Latin Americans and Caribbeans”.
In its report, S&P Global highlighted CAF’s strategy to increase shareholder participation in Costa Rica, Mexico and Dominican Republic which became full members, as well as the incorporation of new members such as El Salvador. In addition, it highlighted the financial soundness of the institution reflected in its liquidity levels, as well as the robust and diversified funding profile of the institution.
Finally, the risk qualifier mentioned the contribution of CAF during the pandemic, in which it provided in a prompt and timely fashion more than USD 16 billion to member countries; and the growth of its portfolio, which reached USD 30.2 billion in a challenging context for the region.
This upgrade of CAF´s S&P rating and the positive outlook, adds up to the positive outlook made by Fitch Ratings this past January.