AfDB retains S&P Global’s Triple ‘A’ rating, stable outlook

THE AFRICAN DEVELOPMENT BANK (AfDB) will continue to play a key role in Africa, supporting the region in the face of the COVID-19 pandemic, international rating agency, Standards and Poor’s Global, has stated.

The agency declared this position as it affirmed its rating of the continent’s development finance institution as a ‘AAA/A-1+’ longand short-term issuer, in the latest credit assessment of the bank, assigning it also with a stable outlook.

S&P Global positively assessed the bank’s very strong financial risk profile, very strong capital adequacy, strong funding and liquidity, extraordinary shareholder support and adequacy of its governance and management.

“We are therefore affirming our ‘AAA’ longterm issuer credit rating on the AfDB,” S&P Global stated.

The rating agency noted the bank’s $115 billion capital increase, approved by shareholders in October 2019, and the replenishment to the African Development Fund, the bank’s concessional window, in December 2019.

“The stable outlook reflects our expectation that, over the next two years, AfDB will prudently manage its capital while maintaining solid levels of highquality liquidity assets and robust funding,” S&P Global said in a statement.

S&P expects that “shareholders will remain supportive by providing timely capital payments”; the bank “will continue benefiting from preferred creditor treatment (PCT); and “prudently manage growth in private-sector lending in a way that’s aligned with its mandate.”

The rating agency’s report further noted that the “AfDB will play a key role supporting the region, particularly in the context of COVID-19. The institution approved an up to $10 billion relief package for 2020, of which $6.9 billion will be financed by AfDB and the remainder through its concessional lending window.”

Akinwumi Adesina, president of the bank expressed delight at the affirmation of the bank’s existing high rating by the S&P, saying: “We are delighted with and welcome S&P

Global’s decision to affirm the bank’s AAA/A-1+ rating. It reflects the bank’s very strong financial position and risk management, as well as our sound governance. We will continue to maintain these standards, with the strong support of all our shareholders, as we deliver much needed financial, knowledge and policy support to our regional member countries during and after this period of the COVID-19 pandemic.”