Moody's affirms CAF's Aa3 rating; maintains stable outlook

Moody's recognised the high credit quality of CAF -development bank of Latin America- by ratifying its Aa3 rating with a stable outlook. The Moody's report highlights the institution's financial strength, the good performance of its assets, the demonstrated commitment of shareholders through constant capital increases and the incorporation of Costa Rica and Mexico as full members of the institution.

"CAF's intrinsic financial strength remains robust with solid asset quality, robust capital buffers and liquidity, despite continued challenges from high credit risk on its loan exposures. The stable outlook reflects Moody's expectation that CAF's capitalization and liquidity levels will remain consistent with its Aa3 rating, as CAF continues to expand its operations, balancing loan growth with adequate liquidity and capitalization buffers," the rating agency said in a statement.

CAF's interim executive president, Renny Lopez, said: "Moody's ratification reflects CAF's financial strength, thanks to the continued support of shareholder countries and the strategy of broadening the shareholder base. The pandemic has put us to the test and we have risen to the countries' needs to support Latin Americans with rapid and timely resources while maintaining credit strength. We will continue to support care and reactivation plans as unconditional partners in the region's wellbeing and development".

CAF closed 2020 with a record of more than $14 billion in loan approvals, mostly to address the effects of the pandemic on the economy and health systems, as well as to improve digital, land and energy infrastructures. At the close of its 50th anniversary, the multilateral agency had accumulated a total of more than $200 billion in approvals since 1970 to promote sustainable development and regional integration.