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Standard & Poor’s upgrades CEB’s rating to AAA, outlook stable

18 February 2019

PARIS – On Friday 15 February, Standard & Poor’s upgraded the rating of the Council of Europe Development Bank (CEB) from AA+, outlook positive to AAA, outlook stable. 

Standard & Poor’s (S&P) has released a research update further to the application of its new rating methodology for IFIs (published on 14 December 2018), resulting in an upgrade for the CEB to AAA, outlook stable. The following reasons have been highlighted: 

  • Scaled-up activity level over the past 3 years
  • A pristine track record of Preferred Creditor Treatment (PCT)

In its research update, S&P highlights the CEB’s increased relevance as a funding contributor in its ‘niche’ market over the past three years and its capacity to swiftly respond to the high demand for investment in social infrastructure. The effort made by the Bank to broaden its activity by re-inventing and modernising its lending tools has been brought to the fore. S&P expects continuity in this robust momentum, as part of CEB’s more dynamic approach.

In the light of its new methodology, which strengthens the role of the PCT throughout the rating process, S&P underscores the Bank’s excellent track record, thereby underpinning its enterprise risk profile to ‘extremely strong’.

The recent development of the Bank’s activity has led to the strengthening of CEB’s overall asset quality, and thus its capital adequacy. S&P maintains its very sound assessment on CEB’s liquidity, financial management and points out the ongoing deleveraging process and the sustained profitability of the Institution. On a different note, S&P emphasises CEB’s continued shareholder support and the high quality of its callable capital. Altogether, these assessments have led to an uplift of S&P’s enhanced financial risk profile from ‘very strong’ to ‘extremely strong’.

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