The commitment achieved by consensus of the shareholder countries of CAF – development bank of Latin America – to strengthen the institution’s assets with a capital increase for a total amount of $7,000 million, the largest in its history, was highlighted by the agency risk rating agency Fitch Rating by improving the outlook of the credit rating to positive, ratifying the long-term rating of A+ and the short-term rating of F1+.
“The Positive Outlook reflects our expectation of an improvement in CAF’s solvency, as a result of the significant capital increase recently approved and the favorable dynamics of the loan portfolio. Despite the recent deterioration in Latin America’s sovereign ratings, CAF’s shareholder capital contributions will support the bank’s credit expansion and portfolio diversification in the coming years, while maintaining “excellent” credit rating indicators. capitalization”, says the rating agency in its report.
CAF’s executive president, Sergio Díaz-Granados, highlighted this good news for Latin America and the Caribbean: “This recognition by Fitch of the joint work of CAF’s shareholder countries to increase the capital of the institution will allow us to offer a more forceful response to promote the well-being of Latin American and Caribbean people, promote social and economic reactivation, be the green bank in the region and lead the digital transformation that will make us more competitive”.
The process of converting Mexico, Costa Rica and the Dominican Republic to full membership of CAF, as well as the incorporation of the Republic of El Salvador, was also highlighted by the risk rating agency. The high capitalization and liquidity indicators, as well as the bank’s excellent track record as a preferred creditor and the determining role as a source of financing for its sovereign borrowers to face the effects of the Covid-19 pandemic, were other factors highlighted by Fitch.
For more than three decades, CAF has carried out a strategy of diversifying its sources of financing, through an uninterrupted presence in global capital markets, which has placed it in a privileged position internationally. The multilateral promotes sustainable development and regional integration, through an efficient mobilization of resources for the timely provision of multiple financial services, with high added value, to clients in the public and private sectors of the shareholder countries.