S&P Global affirms AfDB’s AAA rating with stable outlook

FILE PHOTO: The headquarters of the African Development Bank (AfDB) are pictured in Abidjan, Ivory Coast, September 16, 2016. Picture taken September 16, 2016. REUTERS/Luc Gnago/File Photo - RC196B9DEF90

S&P Global, a rating agency has affirmed its ‘AAA/A-1+’ long- and short-term issuer credit assessment of the African Development Bank (AfDB) with a stable outlook.

The bank’s Communications and External Relations Department made this known in statement on Monday.

It explained that the rating agency positively assessed the Bank’s very strong financial risk profile, very strong capital adequacy, strong funding and liquidity, extraordinary shareholders support and adequacy of its governance and management.

The AfDB said that the rating agency noted the Bank’s 115 billion dollars capital increase, approved by shareholders in October 2019, and the replenishment to the African Development Fund, the Bank’s concessional window in December 2019.

The bank quoted S&P global as saying “the stable outlook reflects our expectation that over the next two years, AfDB will prudently manage its capital while maintaining solid levels of high-quality liquidity assets and robust funding.

“We are therefore, affirming our ‘AAA’ long-term issuer credit rating on the AfDB.

“We expect that shareholders will remain supportive by providing timely capital payments, the Bank will continue benefiting from preferred creditor treatment (PCT) and prudently manage growth in the private-sector lending in a way that’s aligned with its mandate.

“AfDB will play a key role supporting the region, particularly in the context of COVID-19. The institution approved an up to 10 billion dollars relief package for 2020, of which 6.9 billion dollars will be financed by AfDB and the remainder through its concessional lending window.” the agency said.

The statement also quoted the President of the Bank, Akinwumi Adesina, as saying “we are delighted with and welcome S&P Global’s decision to affirm the Bank’s AAA/A-1+ rating.

“It reflects the Bank’s very strong financial position and risk management, as well as our sound governance.

“We will continue to maintain these standards, with the strong support of all our shareholders, as we deliver much needed financial, knowledge and policy support to our regional member countries during and after this period of the COVID-19 pandemic,’’ Adesina said. (NAN)