Fitch Ratings affirms the EDB’s credit ratings at ‘BBB+’; outlook stable
Moscow, 26 November 2021. Fitch Ratings has affirmed the Eurasian Development Bank’s (EDB) long-term rating at ‘BBB+.’ The outlook is stable.
“EDB’s ‘BBB+’ Long-Term Issuer Default Rating remains anchored by its standalone credit profile (SCP). Its SCP is driven by our assessment of the bank’s solvency profile, which is unchanged at ‘a’, the lower of its liquidity and solvency assessments. The bank’s liquidity assessment is also unchanged at ‘aa-’”, the agency’s statement says.
Since the last rating review, there have been two significant rating-relevant developments at the EDB. The first was in July 2021, when the Bank’s Council approved the new 2022–2026 Strategy, which focuses on strengthening the EDB’s unique role as one of the main development banks in its countries of operation, and on building up its cumulative investment to more than US $10 billion over the next five years.
Fitch notes that the Bank’s strategic document outlines an expectation that the paid-in capital will increase by US $1 billion over this period, including contributions from both new and existing shareholders.
The second significant development at the EDB is the improvement in its internal risk management system, which now makes it possible for the Bank to assess the credit risk of both its investment and treasury activities using an internationally recognised rating scale.
The analysts note the EDB’s “excellent” capitalisation as a key rating strength, which is unchanged from last year.
“As of end-2020, the equity/assets ratio was around 34% and we expect this figure to decline slightly over the medium term to a range of 30%-32%,” Fitch notes.
According to the analysts, liquidity continues to be a rating strength for the EDB, with the Bank’s ‘aa-’ liquidity profile reflecting its ‘excellent’ liquidity buffer, ‘moderate’ asset quality and ‘moderate’ access to capital markets. The EDB’s long-term funding sources are Eurobonds, local bonds in Russian roubles and the Kazakh tenge, which the Bank issues depending on the situation in the financial markets and investor demand, as well as tied finance.
Additional Information:
The Eurasian Development Bank (EDB) is an international financial institution promoting integration and development in its member countries. For 15 years, the Bank has worked to strengthen and broaden economic ties and foster comprehensive development in its member countries – Armenia, Belarus, Kazakhstan, the Kyrgyz Republic, Russia, and Tajikistan. The EDB's charter capital totals US $7 billion. The EDB’s portfolio mainly consists of projects with an integration effect in the areas of transport infrastructure, digitalisation, green energy, agriculture, industry, and mechanical engineering. The Bank adheres to the UN Sustainable Development Goals and ESG principles in its operations.
The EDB Media Centre:
Azima Sapargaliyeva +7 (777) 750 00 08 (Almaty)
Sergey Gorbachev +7 (916) 727 22 00 (Moscow)