GCR affirms Afreximbank’s international scale ratings of A, A2

… outlook revised to ‘Stable’ from ‘Rating Watch Evolving’

GCR Ratings (GCR) has affirmed African Export-Import Bank (Afreximbank) international scale long and short-term issuer ratings of A and A2 respectively. The outlook was revised to “Stable” from “Rating Watch Evolving”.

GCR has also affirmed the international scale long term programme rating on the $5 billion Global Medium Term Note (GMTN) Programme of A.

The improved rating reflects GCR’s assessment of a “robust counter-cyclical mandate, underpinned by a strong track record and ongoing preferential creditor treatment (PCT) from shareholders.”

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South Africa became the latest country to affirm the Bank’s Establishment Treaty and Preferred Creditor Status when it recently signed the Instrument of Accession to become a full sovereign member of the Bank.

The report continued: “The Bank’s solid capitalisation and diversified funding profile provide significant buffers against emerging credit risks.” The report also acknowledged the Bank’s diverse shareholding base.

The outlook change from “Rating Watch Evolving” to “Stable”, according to GCR, indicates that there is immaterial downside risk related to sovereign debt restructurings.

Commenting on the Rating action, Chandi Mwenebungu, Managing Director and Group Treasurer, Treasury and Markets at Afreximbank said: “We are delighted that GCR has affirmed its credit rating on the Bank and resolved the outlook to ‘stable’, particularly in the light of recent positive credit developments. We continue to assert that the Bank’s preferred creditor treatment is enshrined in the Bank’s Establishment Agreement, ratified by all member states. It is not a matter of opinion or convention; it is fact”.

Mwenebungu continued, “It is also pleasing to note that GCR acknowledges the Afreximbank’s strong liquidity and capitalisation, and resilient risk profile. This is testament to the Bank’s financial and operational strength and that it has been able to demonstrate firm resolve in the face of continued macro-economic pressures and a challenging environment.”