Japanese Agency JCR Affirms CAF's Credit Rating at AA+

The Japan Credit Rating Agency (JCR) has affirmed the credit rating of CAF - development bank of Latin America and the Caribbean - at AA+ with a stable outlook.

"Its credit ratings reflect (i) a strong support it enlists from the member countries, (ii) its preferred creditor status and (iii) its sound financial status and ample liquidity. The member countries have approved CAF’s massive capital increases in a show of their continued strong support. In addition, Chile, Dominican Republic and Honduras became full member countries in 2023. These will help diversify CAF’s shareholder composition and boost its capital position and lending capacity. CAF reduces risks by lowering concentration in its borrowers and diversifying funding sources while adhering to conservative financial policies such as retention of ample liquidity," the rating agency said in a statement.

The Japanese agency's report also highlights the highest capitalization in the history of the multilateral organization, for USD 7 billion, unanimously approved by the Shareholders' Assembly in 2022. The report highlights the approval of the increase in CAF's authorized capital, from USD 10 billion to USD 25 billion.

For its part, Fitch Ratings affirmed on January 10 the long-term rating at AA- with a stable outlook. In this way, CAF maintains the best credit rating level in its history with the rating agencies JCR, Fitch, S&P Global and Moody's. This was reflected in a greater support from investors, who gave their vote of confidence with the demand for the more than 45 bond issues during 2023, in various international markets in 14 different currencies, reaching for the first time a total amount of approximately USD 6.5 billion.

So far in 2024, CAF has achieved two bond issues with the highest demands in its history, which has allowed it to place two benchmark bonds for an accumulated amount of close to USD 3.5 billion at favorable rates that will be used, among other factors, to boost green financing and sustainable and inclusive growth in Latin America and the Caribbean.