AAA/A-1+ Rating: We will remain Committed to Standard, says AfDB
Reacting to the recent “AAA/A-1+” rating by the S&P Global, a renowned rating agency, the African Development Bank (AfDB) has said it will remain committed to standards and transparency.
Standard & Poor’s (S&P Global), a foreign currency issuer credit rating specialists affirmed its AAA/A-1+ rating of the AfDB with a stable outlook.
S&P specializes in providing credit ratings for bonds, countries, and other investments, with bouquets of other financial market services.
The AfDB President, Dr. Akinwumi Adesina said:
“The AAA rating by S&P Global Ratings affirms our prudent financial and risk management at the African Development Bank, and our strong governance systems.
“We have been able to maintain our high standards despite the tremendous challenges posed by the ongoing COVID-19 pandemic. We are grateful for the steadfast and extraordinary support of our shareholders.
“The Bank remains committed to providing African countries with needed financing support to recover from the health crisis and to strongly grow
S&P Global rates how likely debt will be repaid from the entity in question.
An obligor rated ‘AAA’ has extremely strong capacity to meet its financial commitments. ‘AAA’ is the highest issuer credit rating assigned by Standard & Poor’s.
The rating “AAA” means it is highly likely that the borrower will repay its debt. The worst is “D,” which means the issuer has already defaulted.
The ratings are for informational purposes only—they aren’t investment recommendations, nor do they predict the probability of default.
According to the rating agency, its outlook reflects that AfDB would, over the next two years, “prudently manage its capital while maintaining solid levels of high-quality liquidity assets and a robust funding profile. We also assume extraordinary shareholder support to the bank will remain unchanged.
“Our ratings on AfDB reflect its important role in Africa, marked by a long track record of fulfilling its policy mandate through economic cycles, combined with robust shareholder support. In October 2019, the bank’s shareholders approved its seventh general capital increase (GCI-VII), effectively increasing the bank’s capital base by $115 billion … to $208 billion.
“We expect the capital increase will enable AfDB to continue expanding its reach, particularly in light of the renewed focus on infrastructure financing and private-sector lending. The bank has already been growing steadily”, the S&P said.