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Moody's affirms African Development Bank AAA rating, stable outlook.

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ENPNewswire-November 4, 2021--Moody's affirms African Development Bank AAA rating, stable outlook

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Release date- 03112021 - Moody's Investors Service ('Moody's') has affirmed the African Development Bank's Aaa long-term issuer and senior unsecured ratings.

The outlook remains stable.

In a rating action note dated 28 October 2021, Moody's said the key factors underpinning the affirmation include robust capital buffers, combined with superior risk management which contain the challenges associated with low development asset credit quality amid a difficult operating environment; very strong access to funding which supports the bank's ample liquidity buffer; and very high support from regional and non-regional shareholders to support the African Development Bank's development mandate.

'The stable outlook reflects Moody's expectations that African Development Bank's capital and liquidity buffers will remain in line with Aaa peers and that prudent risk management practices will maintain nonperforming assets at low levels despite a challenging operating environment,' the note further said.

The outlook is also based on expectations that the Bank's shareholders will continue to provide substantial support, through regular capital increases, and when necessary, the provision of support beyond contractual obligations.

The note also commented on the Bank's solid capital position. 'After several years of rising leverage, AfDB's leverage ratio improved slightly to 295% in 2020, compared with 298% in 2019. This reflected a combination of a slower pace of lending growth and the first contributions made under the latest general capital increase, GCI VII, which was approved by AfDB's board in 2019.' Moody's expects further paid-in capital contributions from shareholders to prevent a deterioration in leverage over the next several years.

The bank's liquidity buffer is among the strongest within the Aaa-rated peer group, with liquid assets covering 101% of net cash outflows over an...

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