Moody’s upgrades its rating for CEB to Aaa ‘stable’ outlook

13 March 2023

PARIS – On 10 March Moody’s upgraded the Council of Europe Development Bank (CEB) to its highest rating, Aaa stable outlook.  

After placing the CEB’s Aa1 rating on review for upgrade on 16 December 2022, following the  approval by the  Governing Board of the Bank’s new Strategic Framework 2023-2027 and capital increase on 2 December 2022, Moody’s upgraded the CEB to its highest rating, Aaa stable outlook.

In its rating report published on 10 March 2023, Moody’s decision is supported by:

·         the material improvement of the CEB’s credit worthiness; and

·          the magnitude of the capital increase as a testament to member states' strong support for the CEB as well as the Bank's enhanced relevance in tackling key social challenges in Europe.

In its press release  Moody’s highlighted that the CEB’s capital increase is the first that includes a paid-in capital contribution from its member states in the over 65-year history of the institution. This capital increase will allow for a material improvement of the Bank’s creditworthiness and  a reduction of its leverage.

In its review, the credit rating agency also underlined the CEB’s well-defined lending strategy towards Ukraine -- currently in an advanced process of accession to the Bank – as set out in the new Strategic Framework.

The ‘stable’ outlook reflects Moody’s perspective that the risk resulting from the CEB’s operations in Ukraine will be absorbed by its capital increase. The outlook also highlights the credit rating agency’s expectation that the CEB’s capital adequacy will balance an excellent asset performance and a declining leverage, whilst the Bank’s funding and liquidity profile will remain ‘very strong’, and shareholder support will stay ‘strong’.

Moody’s endorsement recognises the CEB’s extremely strong capacity to meet its financial commitments. The Bank enjoys high credit ratings from Standard & Poor’s (AAA, stable outlook), Fitch Ratings (AA+, positive outlook) and Scope Ratings (AAA, stable outlook) (unsolicited rating).

Set up in 1956, the CEB (Council of Europe Development Bank) has 42 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 (Aaa with Moody's, outlook stable, AAA with Standard & Poor's, outlook stable, AA+ with Fitch Ratings, outlook positive and AAA* with Scope 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.