Fitch affirms CAF's rating at AA- with a Stable Outlook

The rating firm Fitch Ratings affirmed the long-term credit rating of CAF, Development Bank of Latin America and The Caribbean, at AA- with Stable Outlook. This rating action reaffirms the confidence of investors in CAF, which will allow it to offer financing on better terms to its member countries. 

In its report, Fitch highlighted the solvency assessment at 'aa-' and liquidity at 'aa', as well as the medium business risk profile in which the bank operates. "CAF's solvency assessment at 'aa-' is derived from its excellent capitalization and moderate risk profile," Fitch explained in a press release. "CAF's shareholder ongoing capital injections under the general capital increase (GCI) programmes will support the bank's lending growth and portfolio diversification in the coming four years," the release highlights. 

CAF's executive president, Sergio Díaz-Granados, said: "This Fitch rating reflects the commitment of the countries to strengthen CAF and their confidence in us to continue to materialize the goal of being the green bank and the bank of sustainable and inclusive growth in the region. The incorporation of new shareholders and the mobilization of resources from strategic allies will allow us to offer more solutions to improve the quality of life of Latin Americans and Caribbeans." 

Fitch Ratings also highlighted that CAF's expansionary strategy beyond South America and incorporation of new full members as having a positive influence on its solvency metrics via increased capital contributions and loan portfolio diversification. 

In this way, CAF maintains the highest credit rating level in its history with the rating agencies Fitch, S&P Global, Moody's, and JCR. This was reflected in greater support from investors, who gave their vote of confidence with the demand for more than 40 bond issuances during 2023, in various international markets in 15 different currencies, reaching for the first time a total amount of approximately USD 6.250 million. For example, the bond issued in October in the US market for USD 1.750 million represents the largest issuance of CAF in its history in the capital markets, while it also achieved the highest historical demand, for an amount more than USD 3.400 million. 

For more than three decades, CAF has been carrying out a diversification strategy of its sources of financing, through an uninterrupted presence in the global capital markets, which has placed it in a privileged position internationally. The multilateral promotes sustainable development and regional integration through the efficient mobilization of resources for the timely provision of multiple financial services, with high added value, to clients of the public and private sectors of the member countries.