Moody’s affirms CEB rating at Aa1
9 July 2018
PARIS - On 5 July 2018, Moody’s affirmed the CEB’s excellent long-term issuer rating at Aa1 with outlook stable and its short-term issuer rating at P-1.
Moody’s key drivers for its excellent rating at Aa1, outlook stable on the CEB are as follows:
- Conservative risk management policies and practices
- Strong asset performance
- Conservative policies regarding liquidity and asset-liability management
Moody’s assesses CEB’s capital adequacy and liquidity as ‘Very High’, the highest possible level.
The rating agency highlights the rise of the lending volume of the CEB and the growth of social investment needs in Western Europe, generating an improvement of the average borrower quality. The asset quality of the CEB has also been put to the fore, being one of the strongest among Moody’s-rated MDBs.
As a result of its extremely prudent liquidity coverage policy, Moody’s considers that the CEB is very well-positioned among the Aaa-Aa1 peers. In terms of funding, Moody’s spotlights the good access of the CEB to the financial market, as well as its diversified investor base.Despite its assessment of the CEB’s shareholder support as ‘moderate’, Moody’s emphasises the enhancement of support from its member states in the context of the migrant and refugee crisis in Europe, through the Bank’s fiduciary activities, such as the Migrant and Refugee Fund or the Turkey Refugee Account.
Annual Issuer in-depth
Set up in 1956, the CEB (Council of Europe Development Bank) has 41 member states. Twenty-two Central, Eastern and South Eastern European countries, forming the Bank's target countries, are listed among the member states. As a major instrument of the policy of solidarity in Europe, the Bank finances social projects by making available resources raised in conditions reflecting the quality of its rating (Aa1 with Moody's, outlook stable, AA+ with Standard & Poor's, outlook positive and AA+ with Fitch Ratings, outlook stable). It thus grants loans to its member states, and to financial institutions and local authorities in its member states for the financing of projects in the social sector, in accordance with its Articles of Agreement.