Moody’s affirms ATI’S IFSR rating at A3 and changes outlook to positive

Moody's Investors Service ("Moody's") affirmed the A3 insurance financial strength rating (IFSR) of The African Trade Insurance Agency (ATI) and changed the outlook to positive from stable.

ATI is a pan-african development finance institution that provides credit and political risk insurance to companies, investors and lenders undertaking transactions in Africa, with the objective of facilitating trade and investment into Africa. ATI, headquartered in Nairobi, Kenya, is a supranational organization, established by international treaty, and owned and governed by its members, predominately a number of African sovereigns.

Moody's said that the change in outlook to positive reflects the strong growth in ATI'S membership base - that has resulted in improved portfolio diversification and strengthened capital adequacy, and its good profitability despite the challenging operating environment. In addition ATI benefits from its preferred creditor status (PCS) amongst sovereign member states which protects it from the risk of default by member sovereigns through securing recoveries against claims paid on guarantees. Commenting on the elevated risk of default amongst a number of sovereigns to which ATI is exposed, including, for example, Ethiopia (Caa2, negative), Zambia (Ca, stable) and Ghana (Ca, stable) where debt restructurings are being negotiated, Moody's said that ATI'S preferred creditor status is likely to enable it to recover any claim payments it makes related to these sovereigns. At the same time its significant capital buffer positions the company to absorb losses in a range of stress scenarios in the unlikely event of the PCS not being upheld.