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The Caribbean Development Bank (CDB, the Bank) is pleased to announce that Moody’s Ratings has affirmed its Aa1 long-term issuer and foreign-currency senior unsecured bond ratings with a stable outlook. This reflects the Bank’s commitment to financial stability, prudent risk management, and continued efforts to optimise its balance sheet.
Moody’s rating affirmation acknowledges CDB’s strong capital adequacy, robust liquidity metrics, and solid shareholder support, which are cornerstones of the Bank’s financial strength. In their announcement, Moody’s highlighted the following key factors supporting the Bank’s credit profile:
1. Balance Sheet Optimisation Initiatives
- The affirmation reflects CDB’s recent successful implementation of a $450 million Exposure Exchange Agreement (EEA) with the Central American Bank for Economic Integration (CABEI), which will significantly reduce portfolio concentration and diversify credit risks.
- The forthcoming $200-million Portfolio Credit Guarantee (PCG) from the Government of Canada will further enhance CDB’s ability to transfer credit risk, reduce risk-weighted assets, and create additional lending headroom for its Borrowing Member Countries.
2. Enhanced Liquidity Position
- CDB’s liquidity resources improved to over 400% of net outflows in 2024, supported by diversified funding sources and increasing access to liquidity facilities.
- Plans to expand the Bank’s presence in international capital markets through regular bond issuances are expected to further strengthen liquidity and diversify the investor base.
3. Strong Shareholder Support
- Shareholders demonstrated strong endorsement of the Bank’s Special Development Fund (SDF) by approving a historic US$460-million programme for the 11th cycle, covering 2025-2028, and financing social, economic and environmental resilience.
4. Efforts to Strengthen Risk Management Framework
- The ongoing implementation of CDB’s Enterprise Risk Management Framework (ERMF) aligns the Bank’s operations with global standards, enhancing risk management practices and ensuring financial sustainability.
CDB President, Mr. Daniel Best commented: “This affirmation by Moody’s is a testament to CDB’s resilience and its proactive approach to improving risk management and optimising our balance sheet. These initiatives allow us to scale our development impact and deliver transformative financing to our Borrowing Member Countries while maintaining our strong credit standing. We are particularly proud of the successful partnerships established through our Exposure Exchange Agreement with CABEI, and the forthcoming Portfolio Credit Guarantee backed by the Government of Canada, which showcase innovative approaches to Caribbean development financing.”
As Moody’s noted, balance sheet optimisation initiatives like the EEA with CABEI and the PCG with Canada will improve portfolio diversification and risk management while creating headroom for new, impactful lending. These developments further align CDB’s operations with its mandate to support sustainable growth and resilience in its Borrowing Member Countries.
CDB remains committed to implementing innovative financing mechanisms, expanding partnerships, and maintaining fiscal prudence to advance the development agenda of the Caribbean region. With the stable Aa1 credit rating, CDB continues to stand as a trusted partner for investors, donors, and member countries.
The full Rating Action from Moody’s can be found here: Moody’s Ratings affirms the Aa1 ratings of the CDB, maintains stable outlook.
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