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Standard & Poor’s affirms CEB rating at AAA with a stable outlook, Moody’s affirms CEB rating at Aa1 with a stable outlook

8 July 2020

PARIS – Standard & Poor’s and Moody’s affirm their Council of Europe Development Bank (CEB) ratings with stable outlook.

Standard & Poor’s (S&P) published a research update on 6 July 2020, based on the metrics of the 2019 financial year and prospective elements of 2020 related to the CEB’s quick response to Covid-19, affirming CEB’s AAA rating with a stable outlook, the highest rating possible.

The CEB’s assessment highlighted:

  • the ‘aaa’ stand-alone credit profile
  • the ‘extremely strong’ enterprise and financial risk profile.

In its research update, S&P underlined the CEB’s ability to maintain the very sound level of its capital and liquidity metrics, despite its increase in lending activity and its well-diversified funding through modernised derivatives management.

S&P maintained its ‘extremely strong’ assessment of the CEB’s enterprise risk profile, putting to the fore the CEB’s excellent track record of Preferred Creditor Treatment (PCT). It also highlighted its ability to improve disbursement levels along with a solid funding response to the pandemic, demonstrating the CEB’s relevance as a funding agency, supported by its experienced and conservative management.

Consequently, CEB’s ‘SACP’ scoring obtained the highest level possible at ‘aaa’ and therefore did not require any uplift from its shareholder support assessment to reach its AAA rating.

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Moody’s published a credit opinion on 3 July 2020 affirming the CEB’s long-term issuer rating at Aa1 with outlook stable and its short-term issuer rating at P-1.

Moody’s highlighted the Bank’s role as active partner responding to social pressures, including the refugee crisis and the Covid-19 pandemic in Europe.

The agencies’ key drivers for the CEB’s rating are:

  • its prudent risk-management framework which has resulted in a favourable track record of asset quality in spite of a challenging operating environment
  • its consistently strong liquidity policy and conservative asset-liability management
  • the quality of its management.

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 (AA+ with Fitch Ratings, outlook positive, AAA with Standard & Poor's, outlook stable and Aa1 with Moody's, 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.

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