Fitch highlights CAF's capitalization and upgrades the rating outlook to positive

The commitment achieved by consensus among 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 USD 7,000 million, the largest in its history, was highlighted by the risk rating agency Fitch Rating by improving the outlook of its 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 aresult of the recently approved very large capital increase and favourable loan portfolio dynamics. Despite the recent deterioration in Latin American sovereign creditworthinessand the bank's sizeable, CAF'sshareholders' capital contributions will support the bank's lending expansion and portfoliodiversifi cation in the coming years while maintaining 'excellent' capitalisation metrics", 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 region´s green bank and lead the digital transformation that will make us more competitive”.

The process of converting Mexico, Costa Rica and the Dominican Republic to full members of CAF, as well as the incorporation of the Republic of El Salvador, were also highlighted by the risk rating agency. The high capitalization and liquidity indicators, as well as the quality and performance of its assets, and its decisive role as a financing source for its sovereign borrowers to face the effects of the Covid-19 pandemic, were other factors highlighted by Fitch.

CAF has developed a diversification strategy for its funding sources over the past three decades, through constant presence in global capital markets, ultimately reaching a privileged status worldwide. This multilateral agency promotes sustainable development and regional integration through efficient mobilization of funds for a timely provision of multiple financial services with high added value, to customers in public and private sectors of shareholder countries.