Standard & Poor's (S&P) Global Ratings revised CAF's ("Development Bank of Latin America") outlook to positive and affirmed its long-term and short-term issuer credit ratings of 'A+/A-1', respectively.
"The positive outlook reflects our view that CAF will maintain its improving capital position, supported by capital payments from new and existing members that will offset increases in funding and sovereign rating vulnerabilities in the region," the bank said in a statement.
The rating agency also noted that CAF has a substantial and established access to markets, being a regular benchmark issuer in the global capital markets. "We believe CAF will manage balance sheet and capital growth prudently. The institution has made efforts to diversify its portfolio and gradually increase exposure to investment grade sovereigns," it added in its report.
CAF's interim executive president, Renny López, said: "S&P's upgrade of CAF's outlook reflects the institution's financial strength, due to the continued support of its shareholder countries through capital contributions and the admission of Mexico and Costa Rica as full members. We also appreciate the rating agency's recognition of our commitment to help Latin Americans cope with the pandemic and promote their well-being and economic recovery with more than $7 billion".
The affirmation of the S&P rating and its revision of the outlook to positive strengthens investor confidence in CAF's debt securities, recently reflected as the first Latin American issuer to place bonds at the SOFR rate.
CAF closed 2020 with a record of more than $14 billion in loan approvals, mostly to address the effects of the pandemic on the economy and health systems, as well as to improve digital, land and energy infrastructures. At the close of its 50th anniversary, the multilateral agency had accumulated a total of more than $200 billion in approvals since 1970 to promote sustainable development and regional integration.