Ratings agency, S&P Global, has affirmed its ‘AAA/A-1+’ long-and short-term issuer credit assessment of the African Development Bank (AfDB) with a stable outlook.
According to a statement from the African continental financing institution in Abidjan, Cote d’ivoire, the rating agency positively assessed AfDB’s very strong financial risk profile, very strong capital adequacy, strong funding and liquidity, extraordinary shareholder support and adequacy of its governance and management.
“We are therefore affirming our ‘AAA’ long-term issuer credit rating on the AfDB,” S&P Global stated. The rating agency also noted the AfDB’s $115 billion 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 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,” the agency said in a statement.
S&P expects that shareholders will remain supportive by providing timely capital payments and that the bank will continue benefiting from preferred creditor treatment (PCT) and prudently manage growth in private-sector lending in a way that’s aligned with its mandate.
The rating agency’s report further noted that the “AfDB will play a key role supporting the region, particularly in the context of COVID-19. The institution approved an up to $10billion relief package for 2020, of which $6.9billion will be financed by AfDB and the remainder through its concessional lending window.”
President of the AfDB, Akinwumi Adesina, said: “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.”
The African Development Bank Group is Africa’s premier development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). It is on the ground in 41 African countries with an external office in Japan.