Standard & Poor’s revises CEB’s AA+ rating outlook to ‘positive’ from ‘stable’

5 July 2017

PARIS - On 30 June 2017, Standard & Poor’s decided to revise the CEB’s rating outlook to ‘positive’ from ‘stable’, thanks to the CEB’s strengthening mandate fulfilment. At the same time, they affirmed the excellent ‘AA+’ long-term and ‘A-1+’short-term issuer credit ratings.

Standard & Poor’s (S&P) annual rating assessment of the CEB resulted in a revised outlook to ‘positive’ from ‘stable’, mainly for the following reasons:

  • increased lending activity with project approvals rising by 50% in 2016 compared to 2015
  • strengthened role as a favoured funding contributor to social investments and sustained funding relevance

In their rationale, S&P highlights the Bank’s increasing focus on social investment in Northern European countries hosting migrants and refugees and addressing the issue of their long-term integration. In response to rising demand in the social sector, the rating agency sees the CEB’s efforts to broaden its activities over the last two years as a demonstration of the Bank’s strengthening of its relevance and importance.

Cementing its role as a favoured funding contributor is also reflected in the CEB’s new Development Plan 2017-2019. In addition, the Bank’s engagement in partnerships and cooperation in the EU, including the recently created Facility for Refugees in Turkey, has helped to enhance its policy importance.

The CEB’s business and financial profiles were assessed by S&P as very strong. With €1 billion of its €3.5 billion worth of approved projects invested in long-term integration projects for migrants and refugees, the CEB strengthened its public-policy mandate. Its liquidity level remains high compared with peer IFIs and a positive impact on its risk weighted assets is expected as disbursements will increasingly be tilted towards highly rated Northern European countries. As a consequence, S&P expects further enhancement of the CEB’s shareholder support, considered as sustainable since the Bank does not pay dividends.

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.

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