The social development bank in Europe

Credit rating AAA/AA+/Aa1

The Council of Europe Development Bank (CEB) is rated by the three main international rating agencies: Standard & Poor’s, Fitch Ratings and Moody's Investors Service. It enjoys a high rating (AAA/AA+/Aa1) which mirrors its strong financial profile, the support of its shareholders and its stringent risk management policy. On 15 February 2019, Standard & Poor’s upgraded the CEB’s long term rating to ‘AAA’ with a stable outlook. On 5 September 2018, Fitch Ratings had affirmed the CEB’s long term Issuer Default Rating (IDR) at ‘AA+’ outlook stable. On 5 July 2018, Moody’s had affirmed the CEB's long-term rating at Aa1 with stable outlook. The rating of CEB’s short-term debt is affirmed at ‘A-1+/F1+/P-1’ which is the highest grade of the rating scale.

Standard & Poor's: AAA, stable outlook

“CEB has increased its relevance as a funding contributor in its niche market over the past three years, which together with the bank’s pristine track record of preferred creditor treatment, underpins its improved extremely strong enterprise risk profile.”

“The outlook is stable, since we [Standard & Poor’s] expect CEB’s strengths will remain unchanged in the next two years, particularly its newfound positive disbursement dynamics and corresponding funding relevance, together with its very solid liquidity position.”

“With its broadening mandate and increasingly tangible role as a social investor in member countries’ budgets, CEB has managed to scale-up its operations”

“We [Standard & Poor’s] observe an ongoing deleveraging initiative at the bank, which in combination with fairly contained profitability and no expectation of an imminent capital increase from the shareholders, leads us to maintain our view of very strong capital adequacy on a stand-alone basis.”

“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.”

“Shareholders have been supportive since inception.”

Research update: Council of Europe Development Bank Upgraded To ‘AAA’ On Criteria Revision; Outlook Stable (15 February 2019)
Rating report (1 August 2017)

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)