CDB gets highest S&P rating

THE INTERNATIONAL credit rating agency Standard & Poor’s (S&P) has assigned its highest credit rating to the Caribbean Development Bank (CDB).  S&P assigned ‘AAA’ long-term and ‘A-1+’ short-term currency ratings to the bank’s foreign currency credit ratings, and characterised the outlook on the long-term ratings as stable. S&P Credit Analyst Dr Larry Hays said CDB’s ratings are supported by its very strong capitalization.  He explained that “CDB’s shareholders’ equity of nearly US$372 million at year-end 2003 was more than 72 percent of outstanding loans; moreover, CDB had more than US$137 million in callable capital from its ‘AAA’-rated shareholders.”

He added that “together, CDB’s adjusted shareholders’ equity and its callable capital were more than 99 percent of outstanding loans at year-end 2003, positioning it well to honour its obligations even during a protracted period of severe financial stress.” Dr Hays said CDB’s capitalization is particularly strong in light of the historically excellent performance of its loan portfolio, and explained that no public sector loan has ever been written off since CDB commenced operations in 1970, in addition to which the bank had no impaired loans on its balance sheet at year-end 2003. 

He noted that the bank’s liquidity is also consistent with its ‘AAA’ rating, and commented that the rating should remain stable over the medium term, assuming that its management continues the prudent financial policies of the past. CDB President, Dr Compton Bourne, told the Board of Directors of this positive development for the Bank while wrapping up a meeting of the Board at the Hilton Tobago on Tuesday afternoon.