Latin American development banks CAF and CABEI obtained their highest-ever credit rating from Moody’s, following a similar move by S&P last year.
The ratings agency bumped up CAF by two notches to Aa1 and lifted CABEI by one notch to Aa2, it said Friday in separate reports.
The upgrade for CAF was driven by ongoing capital contributions from country members, retained earnings and diverse sources of market funding that has allowed the bank to boost useable equity, reduce leverage and increase its capacity to absorb losses, according to Moody’s.
CAF has sold bonds in US dollars and British pounds and green bonds in euros this year.
CABEI’s upgrade, for its part, comes after board members approved a capital increase to $10 billion from $7 billion previously, which includes additional paid-in capital of up to $483 million.
“We expect these measures to support further growth in useable equity and strengthen loss-absorption capacity as lending activities expand,” Moody’s said.
The two development banks were also upgraded to AA+ by S&P last November. AA+ is S&P’s second-highest rating and is equivalent to Aa2 from Moody’s.