Standards & Poor’s ratings agency has assigned a stable outlook to the Africa Development Bank (AfDB).
The agency, in a report Monday, said it anticipates that AfDB's liquidity would remain very strong and its high franchise value to increase, given the attention Africa is receiving from the international donor community.
“We believe that the subscription and payment of the capital increase by AfDB's shareholders supports the capital adequacy. Our view on shareholder support could change if major shareholders do not pay in the expected amounts.
“Additionally, our revised multilateral lending institutions criteria, which we expect to have in place by the end of this year, could affect the ratings. Historically AfDB has provided medium and long-term loans primarily to African governments and other public-sector entities with sovereign guarantees. However, its focus on the private sector has been increasing over the past few years.
“The bank also makes equity investments and has provided a few small guarantees. At year-end 2011, 93 per cent of the bank's development-related exposure (DRE) was loans, and 2 per cent equity investments. Of outstanding loans, 81 per cent was to governments or was government guaranteed,” the statement added.