“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 the ‘excellent’ indicators of capitalization”, said the rating agency in its report.
For his part, the executive president of CAF, Sergio Diaz-Granados, highlighted that “This Fitch recognition 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 of 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.