The social development bank in Europe

Credit rating AA+/Aa1

The Council of Europe Development Bank is rated by the three main international rating agencies: Fitch Ratings, Moody's Investors Service, and Standard & Poor’s. It enjoys a high rating (AA+/Aa1) which mirrors its strong financial profile, the support of its shareholders and its stringent risk management policy. On 5 September 2018, Fitch Ratings affirmed the CEB’s long term Issuer Default Rating (IDR) at ‘AA+’ outlook stable. On 5 July 2018, Moody’s affirmed the CEB's long-term rating at Aa1 with stable outlook. On 28 June 2018, Standard & Poor’s affirmed the CEB’s long term rating at ‘AA+’ with a positive outlook. The rating of CEB’s short-term debt is affirmed at ‘F1+/P-1/A-1+’ which is the highest grade of the rating scale.

Fitch Ratings: AA+, stable outlook

“CEB’s ratings are driven by its intrinsic credit quality and reflect its strong solvency (assessed at aa-), its excellent liquidity (assessed at aaa) and its low-risk business environment, which provides an uplift of two notches to the lower of its solvency and liquidity assessment (aa-), resulting in an intrinsic rating of aa+.” 

”The bank’s strong solvency assessment is driven by CEB’s very low risk profile, notably the excellent performance of its loan book, with no loan impairment in recent years. Fitch has revised the assessment of the Bank’s preferred creditor status (PCS) to ‘strong’ from ‘moderate’, in part reflecting the strong asset quality track record.”

“CEB’s risk profile also benefits from the high credit quality of its borrowers with an average rating of BBB+ (A after the two-notch upward PCS adjustment), among the highest in the multilateral development bank universe”

Fitch Ratings press release (5 September 2018)
Fitch Ratings Full rating report (9 October 2018)

Moody's: Aa1, stable outlook

“The Council of Europe Development Bank has two principal credit strengths: (1) its conservative risk-management policies and practices, as well as its preferred creditor status, which have resulted in a strong asset performance; and (2) a consistently strong liquidity policy and conservative asset-liability management policies”

“We [Moody’s] assess the Capital Adequacy of CEB as 'Very High', based upon its exceptional asset performance and improving borrower creditworthiness, combined with the gradual improvement of its capital position”

“Borrower quality continue to improve […] which compares favorably with Aaa-Aa1 rated peers”

“CEB has posted stable profitability over the past decade, with an average of €111.7 million for the period 2007-2017. This steady profitability is a credit strength as it has helped to enhance its capital over the years.”

“Our [Moody’s] 'Very High' assessment of the liquidity of CEB reflects its (1) prudent liquidity policy; (2) conservative treasury operations; and (3) diversified sources of funding.”

Annual Issuer in-depth (5 July 2018)
Moody's credit opinion (19 January 2018)

Standard & Poor's: AA+, positive outlook

“Responding to increasing demand, the CEB has meaningfully stepped up its lending activity over the past three years.”

“The ratings on CEB reflect our [Standard & Poor’s] assessments of its business and financial profiles as very strong.”

“We [Standard & Poor’s] base our assessment of the CEB’s business profile on our view of the bank’s governance, role and public-policy mandate.”

“We [Standard & Poor’s] think CEB has the opportunity to increasingly step into the forefront as one of the preferred lenders under its mandate.”

“Our [Standard & Poor’s] funding ratios indicate that CEB is structurally able to cover its scheduled short-term debt repayments and loan disbursements without recourse to new issuance.”

“The outlook remains positive, reflecting our [Standard & Poor’s] view that CEB's lending activity will keep increasing over the next few years, signaling its strengthening role as a favored funding contributor to social investments and sustaining its funding relevance through the cycle.”

Research update: Multilateral Lender Council of Europe Development Bank ‘AA+’ Ratings Affirmed; Outlook Remains Positive (28 June 2018)
Rating report (1 August 2017)