S&P upgrades CAF's rating to AA-

Financial strength, $7 billion capitalization, new members and efforts to be the green bank and the bank for the reactivation of Latin America and the Caribbean.
Directorio de CAF

CAF  -   Directorio de CAF- Banco de Desarrollo de Anérica Latina

The rating agency highlighted CAF's financial soundness, which will be strengthened thanks to the commitment of its shareholder countries with a historic capitalization of US$7 billion, the incorporation of new members, as well as the effort to be the green bank and the reactivation bank in Latin America and the Caribbean.

Standard and Poor's (S&P Global) raised CAF's long-term credit rating to AA- from A+, as well as its short-term rating to A-1+ from A-1. The rating outlook remains Positive. This rating action strengthens investor confidence in CAF, which will enable it to offer financing on better terms to its member countries. 

For CAF, this rating is a recognition of the confidence placed by its shareholders in the renewed strategy of being the Green Bank for economic reactivation, the private sector and subnational governments, reflected in the highest capitalization in the history of the multilateral organization for USD 7 billion approved by the General Assembly of Shareholders in March of this year.

"CAF's policy relevance remains strong with an attractive value proposition evidenced by expanding membership with existing shareholders increasing their participation and new members joining the institution. The positive outlook reflects our view that CAF's role and importance to policy and its capital position can be strengthened backed by significant capital support from its members," S&P Global explained in a press release. 

CAF's executive president, Sergio Diaz-Granados, noted: "We are very pleased with this new rating because CAF is one of the main assets our region has, and this news will translate into better conditions to finance projects that impact millions of people. This is an achievement 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 the participation of shareholders such as Costa Rica, Mexico and the Dominican Republic, which became full members, as well as the incorporation of new shareholders such as El Salvador. Additionally, it highlighted the financial strength of the institution reflected in its liquidity levels, as well as the robust and diversified financing profile of the entity.

Finally, the rating agency referred to CAF's contribution during the pandemic, in which it approved in an agile and timely manner more than USD 16 billion in the last two years to provide the resources required by shareholder countries; and the growth of its portfolio, which reached USD 30.2 billion in a challenging context for the region. 

This increase in CAF's rating and positive outlook by S&P is in addition to the upgrade of the rating outlook to positive by Fitch Ratings in January of this year.